Economic indicators give Kaua‘i optimistic outlook

LIHU‘E — Green economist Ken Stokes presented the Kaua‘i quarterly economic forecast at the Lihu‘e Business Association’s May program.

The report, prepared by Island Matters for the County of Kaua‘i Office of Economic Development, highlights 12 quarterly indicators that reflect economic activity including jobs, money, energy, building and visitors. The update provides a check on economic performance in the first quarter of 2012 and a forecast through the third quarter.

Four key indicators — jobs, income, spending, and electricity — have settled back to 2003 levels, below the boom years of 2006-07. The report uses data compiled by the Hawai‘i Department of Business and Economic Development, and highlights signs that some flat trends will rebound.

Jobs

The report forecasts that the non-agricultural employment job recovery may continue through the third quarter. The trend is moving up as the index climbs above 1.00.

The unemployed jobless counts have been falling, according to the report. The trend is more down while the index is still high.

Kaua‘i’s unemployed declined further to 2,700 in the first quarter, versus 2,900 in the first quarter of 2011. The number of unemployed is forecast to drop again to 2,600 in the third quarter of 2012, which is down significantly from 3,300 in the third quarter of 2012.

The trend for unemployed has been falling rapidly, and is expected to fall further to 2,700 in the third quarter. On an index basis, the third quarter numbers will be 2.17 times the 2003 averages.

Kaua‘i’s job base is climbing again in the first quarter 2012 to 28,100, which is up sharply from 27,600 in the same quarter of 2011. Jobs are forecast to recover further, surging to 29,100 in the third quarter of 2012.

The jobs trend climbed to 27,600 in the first quarter of 2012, and is expected to increase to 28,400 in the fourth quarter. On an index basis, the third quarter numbers will be 4 points above the 2003 averages.

Money

Withholding tax on wages are turning up sharply with index moving above 1.00. The General Excise taxes show that spending will be up slightly with the trend turning up while the index is still below 1.00.

Kaua‘i’s income rose rapidly into 2012, as the inflation-adjusted average monthly withholding tax on wages jumped from $1.6 million in the first quarter of 2011 to $2.4 million in the first quarter of 2012. Income is forecast to climb further up to $2.6 million in the third quarter.

The income trend is moving up, and is expected to reach $2.3 million    through the third quarter. The third quarter deflated index will be 20 points above 2003 averages.

Kaua‘i’s spending moved up in the first quarter of 2012, as inflation-adjusted average monthly collections of general excise taxes climbed to $5.4 million in the first quarter of 2012 from $4.6 million in 2011. Spending is forecast to climb further to $5.8 million in the third quarter of 2012, which is up from the $5.5 total seen in 2011.

The spending trend has been climbing as well, and may reach $5.3 million in the third quarter of 2012. The thrid quarter deflated index will be 7 points below 2003 averages.

Energy

The report predicts that gasoline will bounce back up through the third quarter, a trend that is up while the index is back above 1.00. Electricity is down slightly, although the trend is moving back up, with the index staying above 1.00.

Kaua‘i’s average monthly purchases of gasoline climbed back to 2.5 million gallons in the first quarter of 2012, after falling to 2.2 million in the fourth quarter of 2011. Gas purchases are expected to jump up to 3.0 million gallons in the third quarter.

The gas trend has turned up to 2.3 million gallons in the first quarter and may climb to 2.7 million gallons in the third quarter of 2012. The third quarter index is expected to jump to 1.10 versus 2003 averages.

Kaua‘i’s average monthly purchases of electricity decreased from 36.0 GWh in the first quarter of 2011 to 35.6 GWh in 2012. Electricity demand is forecast to rise sharply to 39.6 GWh in the third quarter of 2012, up from 37.3 GWh in 2011.

The electricity trend has turned back up to reach 36.0 in the first quarter of 2012, and is expected to climb still further to 36.9 GWh in 2012. The first quarter index will reach 5 points above the 2003 averages.

Building

Residential home sales may fall again. The down-trend is flattening, however, and the index is moving up.

Building permits may continue climbing. The trend has turned back up and index rises from near zero.

Kaua‘i’s monthly inflation-adjusted average real estate sales fell back to $21.9 million in the first quarter of 2012 after reaching $35.2 million in the fourth quarter of 2011. Real estate is forecast to fall back to $21.6 million in Q3 2012.    

The real estate trend continues to slide, and is expected to fall to $20.6 million sales in the third quarter of 2012. The home sales index in the third quarter of 2012 is expected to be 48 points below 2003 levels.

Kaua‘i’s inflation-adjusted average monthly building permit value stopped sliding to reach $4.6 million in the first quarter of 2012. Permits are forecast to climb further to $5.0 million in the third quarter of 2012, down from $3.8 million in 2011.

The building permits trend is turning back up and is expected to reach $1.8 million in the third quarter of 2012. The third quarter index may be fully 88 points below its 2003 level.

Visitors

Average daily visitors counts will be up sharply, the report states. The trend is up at a faster pace, and the index is staying high.

Daily spending per person may drop sharply, as the trend is down sharply, and the index is moving down.

The average visitor length of stay may fall through the thrid quarter, and the trend is turning down although the index stays high. Direct passenger counts are still climbing, and the trend is up while the index is staying high.

Kaua‘i’s average daily visitor counts surged to 23,100 in the first quarter of 2012, up from 21,000 in 2011. Visitor counts are forecast to climb further to 25,200 in the third quarter, well above the 2011 level of 21,800.

The visitor trend is clearly rebounding from the first quarter 2010 low of 17,900, and is expected to improve significantly to 23,300 in the third quarter of 2012. The visitor index in the third quarter of 2012 may be 36 points above 2003 levels.

Kaua‘i visitors’ inflation-adjusted average daily spending per person fell sharply from $168.53 in the fourth quarter of 2011 to $149.79 in the first quarter of 2012. Visitor spending is forecast to drop further to $133.56 in the third quarter of 2012. The visitor spending trend is expected to slide to $150.62 in the third quarter. The deflated spending index in the third quarter will remain 18 points below its 2003 level.

Kaua‘i visitors’ average length-of-stay held steady at 8.0 days in the first quarter of 2012, the same as in 2011. Stay-length is forecast to fall to 7.2 days in the third quarter 2012.

The stay-length trend is moving slightly down, and is expected to hit 7.6 days in the third quarter of 2012. On an index basis, the Q3 numbers will be 25 points above the 2003 average.

Kaua‘i’s average monthly passenger count on direct flights continues to climb from 31,200 in the first quarter of 2011 to 38,400 in the first quarter of 2012. Direct flight counts are forecast to climb further to 51,700 in the third quarter of 2012.    

The direct flights trend is climbing steadily from 37,300 passengers in the third quarter of 2011, and is expected to climb further to 44,700 in the third quarter of 2012. On an index basis, the third quarter numbers will be 78 points above the 2003 average.

Read the complete study at www.kaua‘i.gov/oed/statisticsandforecasting.

Island economy topic of June 28 meeting

The Lihu‘e Business Association will present Kaua‘i Economic Development Board President and CEO Mattie Yoshioka to discuss multifaceted efforts to advance a strong, sustainable island economy at a June 28 program from 7:30 to 9 a.m. at Duke’s. For information contact LBA President Pat Griffin at 639-1019.

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