According to the latest economic assessment by the Hawaii Department
of Business Economic Development and Tourism (DBEDT), Hawaii’s economy
was beginning to feel some economic recovery by the first quarter of
2010, after two years of decline. 1 The most encouraging signs that a
recovery was underway occurred in tourism. Visitor arrivals increased
4.5 percent in the first quarter from a year before and total visitor
expenditures were up 5.0 percent. during the first quarter of 2010,
although jobs and new construction authorizations were still showing
General excise tax (GET) revenues, an indicator of
economic activity in the state, increased 4.6 percent in the first
quarter of 2010 as compared with the same period in 2009. This was the
first year over year increase in five calendar quarters. Another area of
solid gain in tax collections for the first quarter of 2010 was the
transient accommodations tax, which increased 12.3 percent, or $6.4
million. This was partly due to an increase in the tax rate in mid 2009.
in Table 1, the latest economic outlook for Hawaii by DBEDT expects
continued gradual recovery through 2010 and into 2011 and beyond.
Hawaii’s economy depends significantly on conditions in the U.S. economy
and key international economies, especially Japan. For the U.S. economy
continued positive economic data in recent months has resulted in
gradual optimism being reflected in national economic forecasts.
Forecasts also continue to improve for Hawaii’s most important foreign
Based on the updated U.S. and International
outlook as well as new data on the Hawaii economy, the revised forecast
for Hawaii shows slightly more encouraging expectations, although the
basic projection of a slow and gradual recovery has not changed.
Hawaii's economy measured by real GDP is projected to show a 1.1
percent increase in 2010. That growth is expected to increase modestly
to 1.4 percent in 2011. Tourism arrivals are expected to increase 2.6
percent in 2010, and increase to 4.1 percent in 2011.
increase in the visitor forecast, wage and salary jobs will likely show
a 0.9 percent decline in 2010. It is likely that current excess
capacity in the visitor industry will accommodate more visitors without
an immediate increase in the workforce. However, modest growth in jobs
is expected to occur in the second half of 2010. In 2011, jobs are
projected to increase 0.8 percent. Personal income should show a 1.9
percent increase in 2010. In 2011, current dollar personal income is
forecast to increase 3.0 percent, of which 0.8 percent will be real
growth after inflation.
Beyond 2011 the gradual recovery is
expected to continue with modest job growth of around 1.0 percent for
2012. Visitor arrivals should show a 4.5 percent increase in 2012.
Hawaii’s real GDP growth in 2012 is expected to reach 2.0 percent. The
gradual recovery should continue into 2013, assuming national and
international economic conditions continue to improve.