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State: Economic outlook better than thought; Maui sees highest percentage increase of jobs

Courtesy of Merriman’s Hawai’i and Handcrafted Restaurants.

The state’s economic forecast is slightly better than predicted, and Maui County saw the highest percentage increase of jobs in the fourth quarter of 2021, according to a recent state report. 

Hawaiʻi Department of Business, Economic Development and Tourism’s first quarter 2022 Statistical and Economic Report released Wednesday raised its economic growth forecast for 2022 by one-fifth of a percentage point from 3% projected in the fourth quarter 2021 to 3.2% in the current projection. 

The state’s economic growth rate, measured by the growth of real gross domestic product (GDP), dropped 10.8% in 2020 and increased 3.2% during the first three quarters of 2021.

While the fourth quarter 2021 GDP data for the state will be available on March 31, DBEDT expects the economic growth for 2021 will end up at 3.8%. 

Looking forward the expansion path will continue around 2% or more in 2023, 2024 and 2025.  

“These growth rates are higher than the projections made last quarter,” the report said.  

Maui County added 7,500 non-agricultural wage and salary jobs for a 13.1% increase in the fourth quarter of 2021 over the same quarter of 2020. 

Local jobs spiked the most in the Accommodations sector, which added 3,900 jobs or 69.6%, followed by Food Services and Drinking Places, which added 1,200 jobs or 27.3%; Arts, Entertainment and Recreation, which added 1,100 jobs or 52.4%; Transportation, Warehousing and Utilities, which added 500 jobs or 16.7%; and Professional and Business Services, which added 500 jobs or 10%. 

Comparatively, Kauaʻi saw a 9.5% increase to 2,300 jobs in the fourth quarter, with the bulk in the Accommodations sector; Oʻahu saw a 8.2% increase to 32,500 jobs, with most in the Food Services and Drinking Places; and Hawaiʻi island rose 6.5% to 3,800 jobs, with many in the Accommodations. 

During the fourth quarter of last year, Maui County had the highest percentage of unemployed.  

In the fourth quarter of 2021, the unemployment rate in Maui County decreased 10.4 percentage points from 17.3 % to 6.9%; Oʻahu fell 4.9 percentage points from 9.9% to 5%; Hawaiʻi island dropped 5.6 percentage points from 10.9% to 5.3%; and Kauaʻi shed 8.3 percentage points from 15.5% to 7.2%. 

The state predicted that non-agriculture payroll jobs will not recover to the pre-pandemic level of 2019 until after 2025, though. 

Visitor arrivals are forecast to reach 10.4 million in 2025, which would exceed 2019’s record high of just over 10 million arrivals, according to the report. 

Arrivals may reach 9 million by this year, 9.7 million by 2023, 10 million by 2024 and 10.4 million by 2025. In 2019, visitor arrivals reached about 10.2 million.  

Also, inflation rates are higher than those predicted last quarter.  

Measured by the Honolulu Consumer Price Index for urban consumers, inflation is expected to increase this year to 4.8%. Inflation will then increase at rates between 2.1 and 2.6% in the following years until 2025. 

Overall, Hawai’i’s recovery outlook was slightly better than expected.

“Hawai’i’s economic recovery has been gaining momentum as we enter the last month of the first quarter of 2022,” Mike McCartney, DBEDT director, said in a news release.  

However, he added that the global supply chain disruptions and increasing oil and energy prices due to the war between Russia and Ukraine may impact Hawaiʻi’s economy, especially the airlift and demand for travel.  

“We are working with the petroleum companies to diversify the source of oil imports and minimize the impact of any international crisis,” McCartney said. 

Original source: https://mauinow.com/2022/03/04/state-economic-outlook-better-than-thought-maui-sees-highest-percentage-increase-of-jobs/

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