HAWAII ECONOMIC EXPANSION CONTINUES WITH SLOWER PACE
DBEDT News Release No. 15-04, May 13, 2015
HONOLULU—In its second quarter 2015 Statistical and Economic Report, the Department of Business, Economic Development & Tourism (DBEDT) projects that Hawaii’s economy will continue its stable growth in 2015 and beyond but at a slower pace than previously projected.
“The downward adjustment in Hawaii’s economic growth rate is mainly due to the slower than expected growth of the U.S. economy during the first quarter and the decline in Japanese visitor spending as a result of a strong U.S. currency,” said DBEDT Director Luis P. Salaveria. “Our economic fundamentals are still healthy. Our labor market is among the best in the U.S., and our construction industry is picking up, especially in residential construction.”
During the first quarter of 2015, U.S. economy grew by only 0.2 percent. Harsh weather, low energy prices, a strong dollar, and the labor dispute at West Coast ports were among the factors causing the slow growth. These factors were also reflected in visitor spending in Hawaii during the first quarter of 2015. Daily visitor spending decreased in all the markets except the Canadians, resulting in a decrease of 1.3 percent in total visitor spending during the first quarter of 2015.
For the current economic projection, DBEDT adjusted Hawaii’s economic growth (growth in real gross domestic product) to 2.5 percent for 2015, down from the 3.1 percent projected three months ago. Compared with the average economic growth rate of 1.2 percent during the past 20 years (1994 – 2014), Hawaii’s current economic growth rate is still very healthy.
Non-agriculture payroll jobs increased by 0.8 percent in first quarter this year, lower than expected. DBEDT now projects that the non-agriculture payroll job count will increase by 1.1 percent in 2015, lower than the 1.5 percent projected in the first quarter of this year.
Hawaii’s employment reached 646,750 during the first quarter of 2015, the highest level of employment in Hawaii’s history. The non-agriculture job count was 628,500 during the first quarter of 2015, a record level for a first quarter job count.
The unemployment rate of 4.1 percent (not seasonally adjusted) in Hawaii during the first quarter of 2015 ranked the 4th lowest in the nation.
Initial unemployment claims declined 17.3 percent during the first four months of 2015. On a typical week during the first four months of 2014, 1,800 people filed applications for unemployment benefit, and that number dropped to 1,500 during the first four months of 2015.
The value of private building permits granted during the first quarter of 2015 increased by 71.1 percent as compared with the same period a year ago. Leading the increase was the value of commercial and industrial construction permits with 304.3 percent increase, followed by residential permits with a 220.3 percent increase. The value of permits for additions and alterations declined by 15.9 percent during the first quarter of 2015, but that area shows signs of improvement during the most recent months.
Visitor arrivals are expected to reach 8.5 million in 2015, a growth of 2.5 percent from last year. This growth rate is higher than the 2.1 percent projected in February of this year. However, visitor spending is adjusted to a lower growth rate of 2.0 percent from 3.4 percent projected last quarter. The main reason for lowering the visitor spending projection is the strong U.S. dollar and the shifting between international and domestic visitors.
DBEDT expects healthy economic growth to continue into the future, as seen by real GDP growth projected to be at 2.4 percent in 2016 and 2.2 percent in 2017. Though lower than previously expected, the economic growth is well above the average growth rate experienced during the last 20 years. The current economic expansion is expected to last beyond 2017.
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 here.
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