HONOLULU – The Department of Business, Economic Development and Tourism released its second quarter 2019 Statistical and Economic Report today with first quarter results.
Given the economic conditions inside and outside of Hawaii, DBEDT expects that Hawaii’s economy will continue the slower growth for the next few years between 1.2 and 1.4 percent.
“Hawaii has been experiencing lower but stable economic growth during the last two years as reflected by declining visitor spending and increasing construction value.” said DBEDT Director Mike McCartney. “Our labor market continues to perform well with unemployment rate still among the lowest five states in the nation during the first four months of 2019.”
Though visitor arrivals increased by 2.6 percent during the first quarter of 2019, visitor spending decreased by 2.4 percent due to the decrease in daily visitor spending for all the markets except cruise visitors who showed a 2.3 percent increase in daily spending.
DBEDT revised the visitor industry forecast with visitor arrivals now growing at 2.6 percent for 2019, higher than the 2.0 percent projected last quarter.
However, the growth of nominal visitor expenditures is projected to be 1.1 percent for 2019, lower than the 3.3 percent projected last quarter. This lower visitor expenditure projection is based on the daily visitor spending data reported by the Hawaii Tourism Authority. During the first quarter of 2019, daily visitor spending decreased by 2.6 percent.
Real estate indicators were also mixed during the first four months of 2019. Number of sales for single family and condominium homes declined on all major islands except for condo sales on the island of Hawaii which increased by 4.4 percent.
Median sale prices for single family homes increased on all islands except Kauai, which experienced a decrease in median sale price of nearly 10 percent. Median condo home sale prices fell on Oahu and the island of Hawaii but increased on Maui and Kauai.
DBEDT kept its economic growth forecast (GDP) from the first quarter of 2019 unchanged at rates between 1.2 percent and 1.4 percent for the next few years.
Economic data for the first few months of 2019 were mixed. The good news includes the following:
Total value of private building permits increased 8.7% during the first quarter of 2019. Though the value of residential permit decreased by 19.0 percent, value for commercial and industrial permits decreased by 39.3 percent, value for additions and alterations increased by 67.8 percent which could offset the decrease in the other two categories.
State government spending on capital improvement projects increased 12.5 percent during the same period.
State general fund revenue increased 7.6 percent during the first four months of calendar year 2019, with an increase of 9.3 percent for the general excise tax and 5.4 percent for individual income tax. The two categories of taxes accounted for 85 percent of the total state general fund revenue. The general fund revenue collected during the first four months of 2019 was the historical record high level for the first four calendar month period.
The unemployment rate, which is not seasonally adjusted, averaged 2.9 percent growth during the first four months of 2019, higher than the 2.2 percent experienced during the same period in 2018. Several industries lost jobs with retail trade losing the largest number of jobs at 1,500; followed by manufacturing with 700 fewer jobs; and art, entertainment and creation loss of 400 jobs.