DBEDT: Hawai’i Economy Holds Steady
Hawai’i’s economy will continue to hold stable growth over the next few years, according to the recently released fourth quarter 2015 Statistical and Economic Report by the State of Hawai’i Department of Business, Economic Development, and Tourism.
The first three quarters of 2015 showed labor market improvements and historically high levels of jobs, including civilian labor force, employment, and payroll.
DBEDT says the recent report shows a shift in the visitor marker with the strong United States dollar and weakening Japanese yen.
Arrivals from Japan have declined in 2015 by one percent through September. Japanese visitors are also spending 10.1 percent less while in the islands.
On the other hand, visitor arrivals from the U.S. West market increased 7.5 percent, and visitors expenditures from this market increased by 6.9 percent.
“We are pleased that Virgin American started a new daily flight from San Francisco to Honolulu on Nov. 2 and will start a daily flight from San Francisco to Kahului on Dec. 3 this year,” said DBEDT Director Luis P. Salaveria. “This will bring more West Coast visitors to our state and offset the decline in Japanese visitors. This news and the continued growth in our local job market are positive trends in our state’s economy.”
The projected number of visitor arrivals in 2015 is unchanged, according to DBEDT calculations. Projections for 2016 through 2018, however, is slightly increased compared to the projection completed in August.
“From the passenger count data DBEDT collects on a daily basis, passengers increased from 4.1 percent for October and 4.8 percent for the first two weeks of November,” said Dr. Eugene Tian, Economic Researcher Administrator. “With an increase of 3.9 percent in scheduled air seats to Hawai’i for the fourth quarter, we are confident that 2015 will be a record year for visitor arrivals.”
Total expenditures are expected to be $15.4 billion, a notch lower than the previous quarterly report that listed $15.5 billion. The change is reportedly due to the decrease in Japanese daily visitor spending.
Air seats are projected to increase by 2.6 percent during the first quarter of 2016, and a stable 1.7 to 1.8 percent visitor arrival increase is expected over the next few years.
Throughout Hawai’i, a total of 8,100 non-agricultural payroll jobs were added during the first nine-months of 2015. Of that number, retail trade added 1,700, healthcare and social services added another 1,700, professional and business services added 1,600, food services and drinking places added 1,500, and construction added an additional 1,100 jobs. During the same time period, federal and state government lost 500 and 800 jobs, respectively.
During the first nine months of 2015, Hawai’i’s unemployment rate was ranked eighth lowest in the nation at 3.9 percent.
Unemployment rates for all counties fell below five percent and the gaps between neighbor island counties and Honolulu have continued to decline. On the Big Island, the unemployment rate was 4.8 percent.
DBEDT expects that non-agriculture payroll jobs will increase by 1.3 percent in 2015, a slightly higher projection that the August quarterly report. In addition, DBEDT projects that the unemployment rate will also drop to 3.8 percent.
Unemployment claims have declined by 17.9 percent in 2015, as of the first week in November and compared to the same time period in 2014.
The construction industry continues to boom with the value of private building permits issued during the first nine months of 2015 increasing by 28.7 percent, as compared with the same period a year ago.
Construction jobs have increased by 3.5 percent during the first nine months of 2015.
Hawai’i’s economic growth rate for 2015 has been revised by DBEDT to 2 percent from the 1.9 percent that was projected last quarter.
The economic growth rate projected in August for the coming year through 2018 holds still at 2.3 to 2.4 percent.
Statewide growth rates are slightly lower than the U.S. economic growth rates of 2.4 percent for 2015 and 2.6 percent for 2016.
Hawai’i’s economic growth rates have been below the U.S. rates since 2012 and it’s a trend that’s expected to stay for the next few years.