Economic forecast “flat” for Kaua‘i

LIHU‘E — Kaua‘i’s economy will remain flat in coming months, according to a report released Tuesday by the county’s Office of Economic Development.

While the visitor industry is continuing to improve, the job outlook is worse, according to the Quarterly Economic Outlook report.

The report, which contains information specific to Kaua‘i, is prepared by the research firm Island Matters LLC on a quarterly basis as part of an annual contract with the Office of Economic Development, the agency states in a news release about the report’s findings.

“The good news is that the visitor industry is continuing its steady trend upward,” Kaua‘i County Economic Director George Costa said in the news release from his office.

“In terms of visitor expenditures, a huge increase of $30 million was reported in December 2011 alone, compared to December 2010, which resulted in overall fourth quarter average expenditures topping 2010 by $14 million,” Costa said.

Ken Stokes, an economist with Island Matters, who compiled the data in the  quarterly report, said the total job count in the fourth quarter of 2011 was 27,100, down 500 from the same period in 2010.

Stokes said the county might drop an additional 400 jobs in the first quarter of this year.

“With the exception of the visitor component, there are few signs that the mostly flat trends we are seeing will rebound in the quarters ahead,” Stokes said in the news release.

“The job count is one of four key indicators that have settled back to about the same levels they were in 2003,” Stokes said. “The others are income, spending and electricity purchases. All four indicators are well below the boom years of 2006-2007.”

In the tourism sector, Costa said per person, per day spending increased 3.7 percent in the fourth quarter of 2011, and will likely continue its upward trend.

The average daily visitor count in the fourth quarter of 2011 was 20,445 and is expected to be 23,900 in the first quarter of 2012. This represents a 15 percent increase over the same period last year.

Also trending upwards is the average visitor’s length-of-stay, which was 7.6 days in the fourth quarter of 2011.

“The flattening trend in electricity demand is also potentially good news,” Costa said. “After a modest uptick in demand early in 2011, the first quarter of this year saw a 12 percent reduction in demand likely due to increases in oil and gasoline prices.”

The quarterly report shows that home sales and building permits are still trending down, although inflation-adjusted sales had a slight increase in the fourth quarter of 2011, and should hold steady through the second quarter of this year.

Also included in the report is data on construction activity, which inched back up in the fourth quarter. But construction activity is  projected to decrease slightly through the second quarter of this year.

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