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The State of Hawaii at a Glance
Hawai'i, "The Aloha State", comprises a chain of 137 islands in the Central Pacific Ocean, including eight major islands. The archipelago is one of the most isolated land masses in the world and lies 2,400 miles from the west coast of the U.S. Mainland. Honolulu, the state capital, is located on the island of O'ahu. Hawaii's approximately 1.3 million residents are joined each year by about 7 million visitors, who enjoy the state's pleasant climate, famous beaches, surf, active volcanoes and Polynesian cultural heritage.
Hawaii's economic performance outpaced much of the nation in 2003-2006, but the state economy fell into a deep recession with the end of the national construction boom and the onset of the global financial crisis in 2008. Tourism and construction fell off, and job growth turned sharply negative. Recovery was underway by the end of 2009; however, the pace of recovery was expected to be modest because of anticipated slow growth in major tourism markets and drag from State and local government fiscal conditions.
The state experienced a strong construction industry expansion over the past decade, driven primarily by residential investment but with an important commercial component as well. The housing market peaked mid-decade, and there has been a sharp drop in resale volume and a moderate decline in median prices since then. There were signs of a pickup in home resales and prices late in 2009, and construction was expected to benefit from government infrastructure spending.
Hawaii's economy is centered on the tourism industry: transportation, accommodation and food services, and retail trade sectors represent a significant fraction of total jobs. The construction sector has shed jobs after considerable expansion during the past decade. About a fifth of the Hawai'i's jobs are in the government sector—with both state and federal civilian components, as well as a large military component. Non-tourism service sectors such as health care, business, administrative and professional fields have generally grown faster than the economy overall, contributing to gradual diversification of the state economy.
Labor markets throughout the state were very tight mid-decade, and the state unemployment rate dipped to 2.5% in 2005. Unemployment has surged with the onset of recession, and is particularly high on the more tourism-dependent Neighbor Islands. The pace of job losses declined over the course of 2009 and the unemployment rate stabilized. Some sectors began to post small net job gains.
The majority of tourists to Hawai'i hail from the U.S. mainland. Visitors from the Western U.S. comprise more than 40% of total arrivals, and visitors from the Eastern U.S. comprise about a quarter of all arrivals. The number of Japanese visitors peaked in the mid-1990s and has declined considerably since then. Visitor arrivals dropped sharply in 2008, but stabilized in 2009. Modest gains are expected as the U.S. and global recoveries strengthen.
The following table summarizes a few key indicators for the state of Hawaii's economy. Please click on Tables above to see historical data for an extensive set of economic indicators, or you can chart individual indicators from our interactive graphing environment on the Graphs page.
Non-Farm Jobs (Thou)
Unemployment Rate (%)
Inflation Rate, Honolulu MSA (%)
Real Personal Income (1982-84$Mil.)
Source: UHERO and other sources. Table copyright UHERO, 2011