HONOLULU – The Department of Business, Economic Development and Tourism (DBEDT) released its fourth quarter 2017 Statistical and Economic Report Wednesday, which indicated Hawaii’s overall economic condition should remain stable into the next few years and predicted steady economic growth at around 1.5 percent.
During the first 10 months of 2017, the tourism industry has outperformed expectations, per the report. During the first nine months of the year, visitor arrivals increased 4.9 percent and visitor spending increased 7.1 percent.
Visitor arrivals appear on course toward another record-setting year.
“We are happy to learn that scheduled air seats, the supply side of the tourism industry, will increase by 8.5 percent during the first three quarters of 2018,” said DBEDT Director Luis P. Salaveria. “Based on the current trend, there is the potential that we may be welcoming more than 9.5 million visitors in 2018.”
The labor market condition in Hawaii has been one of the best in the nation in the last few years, DBEDT explained. In October 2017, the unemployment rate registered a record low rate of 2.2 percent, seasonally adjusted rate, and was the lowest rate in the nation for October.
Year-to-date, Hawaii’s unemployment rate ranked the third-lowest in terms of seasonally adjusted rate and ranked the lowest in terms of non-seasonally adjusted rate, according to the release.
There were 12,850 people looking for jobs in October, the lowest level since January 2007. During the first 10 months of 2017, average labor force and employment reached record-high levels.
The value of private building permits increased 2.8 percent during the first nine months of 2017, the report stated. The value of residential permits increased 14.7 percent, commercial and industrial permit values increased 119.4 percent, and value of additions and alterations decreased by 22.6 percent.
The increase in building permit values will be reflected in construction activities next year, per the report.
The most recent economic forecast for the U.S. and the world indicates that most economies, especially those from which Hawaii’s visitors hail, will experience continued economic growth in 2017 and 2018. The U.S. economy is expected to grow by 2.2 percent in 2017 and 2.5 percent in 2018, DBEDT said.
DBEDT revised the visitor industry forecast upward again with visitor arrivals now growing at 4.6 percent for 2017, 2.3 percent for 2018 and 1.5 percent for 2019 and 2020, according to the release. Visitor expenditures will be at 6.7 percent for 2017, 3.9 percent for 2018, and 3.6 percent for 2019 and 2020.
DBEDT also revised its projection of Hawaii’s economic growth, as measured by the real gross domestic product (GDP), upward from the third quarter projection to 1.7 percent for 2017, 1.5 percent for both 2018 and 2019, and 1.4 percent for 2020.
“The overall economic condition is good. We have one of the best labor markets in the nation, tourism is performing well, our real estate market continues to be strong, and more building permits are being issued,” said State Economist Dr. Eugene Tian. “The challenge is that not all the industries are performing well, some industries continue to lose jobs.”
DBEDT kept the nominal personal income growth rates unchanged from the previous quarter forecast in the neighborhood of 3.3 and 3.5 percent. Real personal income projections were also kept the same as the previous quarter forecast at rates below 2 percent for the next few years, according to the report.
The DBEDT Quarterly Statistical and Economic Report contains more than 120 tables of the most recent quarterly data on Hawaii’s economy as well as narrative explanations of the trends in these data.