In its first quarter 2013 economic report, the Department of Business, Economic Development and Tourism predicts a stronger economic growth in 2013, outpacing the national growth rate.
DBEDT also expects to see continued positive growth in 2014.
“We are encouraged by the continued expansion in our visitor industry and the recovery in the construction and real estate sectors,” said DBEDT Director Richard C. Lim. “This positive forecast is particularly striking, given our decision to be somewhat conservative relative to other forecast models, taking into consideration several unknown variables down the road, like the impact of potential federal budget cuts.”
Despite its conservative model, DBEDT believes the state’s economic recovery will continue -- based on a stronger visitor industry performance and growth of other non-tourism sectors such as financial activities, professional services and health services.
Following higher than expected growth in 2012 visitor arrivals, DBEDT projects that overall 2013 visitor arrivals will increase by 5.4 percent, and that total visitor spending will increase by 7.1 percent.
The consensus forecast by the top 50 economic forecasting agencies projects a 1.9 percent economic growth rate for the United States for 2013. Forecasts for Japanese real GDP growth in 2013 were less optimistic, at 0.9 percent in the most recent economic forecast.
For the local economy, DBEDT increased the forecasted growth rates of most of the economic indicators such as real personal income, GDP, and jobs, compared to its forecast in November 2012.
The number of non-agricultural wage and salary jobs in Hawaii is expected to increase 2.2 percent in 2013. Non-agricultural wage and salary jobs increased 1.6 percent in 2012. As with the national economy, job growth has lagged other economic indicators in Hawaii.
For other major economic indicators, the current forecasts are mostly more optimistic compared with the previous forecasts. The forecast for 2013 real gross domestic product for Hawaii is 2.6 percent growth. The current forecast of current dollar personal income growth in 2013 is 5.0 percent. The real personal income forecast in 2013 is 2.5 percent growth.
DBEDT expects the Honolulu Consumer Price Index, a proxy for inflation, to rise 2.4 percent in 2013 – the same as in the previous forecast.
Forecasts for 2014 are also mostly more optimistic compared with the previous forecasts. Non-agricultural wage and salary job count is currently expected to increase by 1.8 percent. The number of visitor arrivals is projected to grow by 2.5 percent, and visitor expenditures will increase by 5 percent.
Real GDP growth in 2014 is forecast to grow 2.5 percent, the same as the previous forecast. Real personal income growth in 2014 is forecast to be 2.8 percent, also the same as the previous forecast.
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.