In its third quarter 2014 statistics and economic report, the Department of Business, Economic Development and Tourism revised Hawaii's economic growth upward due primarily to the prevailing low inflation rate.
"Hawaii’s inflation rate (1.1 percent) was lower than the U.S. average for the first time since 2003," said DBEDT Director Richard C. Lim. "At the same time, our labor market continues to improve; we are seeing a record-high labor force and workers employed during the first seven months of this year."
Also, the state's unemployment rate remains one of the lowest in the nation.
Though economic indicators continue to be mixed during the first half of 2014, DBEDT economists see signs of improvement during the second half of the year.
Visitor arrivals during the first half of 2014 were down by 0.5 of a percent, but the number of scheduled air seats (an indicator of the supply side of tourism) is expected to increase by more than 5.0 percent during the second of half of 2014. Increased air seats motivates a prediction that visitor arrivals hit a new record this year, with 8.3 million visitors and $14.9 billion in spending.
Though landfall of Tropical Storm Iselle and the threat of Julio resulted in 13,500 visitor reductions for the two days of Aug. 7 and 8, visitor counts are quickly recovering.
Through July this year, non-agricultural payroll jobs increased nearly by 7,000 as compared with the same period last year, with many industries adding jobs.
Despite a net loss of 100 jobs in the construction sector, the value of total private building permits increased by 7.0 percent so far through July 2014, indicating more construction activity in coming months.
Hawaii’s inflation rate is expected to remain low for the next few years. DBEDT expects that the consumer inflation rate will be 1.5 percent in 2014, 2.2 percent in 2015, and gradually increase to 3.0 percent by 2017.
The unemployment for the first seven months of 2014 was 4.5 percent. DBEDT analysts predict the unemployment rate will drop to 4.3 percent for 2014, 4.0 percent in 2015, and slip below 4.0 percent thereafter.
Hawaii real personal income growth is projected to grow at 2.6 percent in 2014, higher than the 2.1 percent projected in the previous forecast. For 2015, the new projection is 2.5 percent, also higher than the 2.2 percent projected last quarter.
Real Gross Domestic Product (GDP), the value of goods and services produced measured by constant 2009 dollars, is now expected to grow by 2.6 percent for 2014, higher than the 2.4 percent projected last quarter. Real GDP growth in 2013 was 1.9 percent and the past 10-year average growth rate was 2.0 percent.
The DBEDT Quarterly Statistical and Economic Report contains more than 100 tables of the most recent quarterly data on Hawaii's economy as well as narrative explanations of the trends in these data.
The full report is available at http://dbedt.hawaii.gov/economic/qser/.