eugene tian - hawaii state legislature · 2019-01-03 · condos • home sales decreased on oahu...
TRANSCRIPT
Eugene TianDepartment of Business, Economic Development & Tourism
to the
Current Hawaii Economic Conditions
Committee on Ways and Meansand
Committee on Finance
January 3, 2019
Summary of Current Hawaii Economic Conditions
• Lowest unemployment rate in Hawaii’s history and lowest in the nation, 2.2% Y-T-D through November 2018
• Record high level of labor force, employment, and job count
• Non-ag Payroll job grew 1.7%, adding 11,100 jobs through November 2018
• Tourism industry growth strong, 6.1% for arrivals and 8.0% for expenditures Y-T-D through November
• Value of private building permit increased 0.2% Y-T-D through November
• Median home sale prices continue to increase on all counties for both single family and condos
• Home sales decreased on Oahu and Big Island for both single family and condo but increased significantly on Maui and Kauai
• General excise tax revenue increased 2.5%, individual income tax increased 12.8% through November
The U.S. and World Economies
Trough PeakExpansion
MonthsOctober 1945 (IV) November 1948(IV) 37October 1949 (IV) July 1953(III) 45May 1954 (II) August 1957(III) 39April 1958 (II) April 1960(II) 24February 1961 (I) December 1969(IV) 106November 1970 (IV) November 1973(IV) 36March 1975 (I) January 1980(I) 58July 1980 (III) July 1981(III) 12November 1982 (IV) July 1990(III) 92March 1991 (I) March 2001(I) 120November 2001 (IV) December 2007(IV) 73June 2009 (II) As of January 2019 115Average Expansion, 1945-2009 (11 cycles) 58.4
____________________Source: National Bureau Economic Research, US Business Cycle Expansions and Contractions
U.S. business cycles reference dates
Period U.S. Hawaii1957-1967 4.3% 6.5%
1967-1977 3.1% 5.1%
1977-1987 3.2% 3.3%
1987-1997 3.1% 1.9%
1997-2007 3.0% 2.4%
2007-2017 1.4% 1.1%
1957-1987 3.5% 4.9%
1987-2017 2.5% 1.8%
____________________Source: U.S. Bureau of Economic Analysis and Hawaii DBEDT
Hawaii’s economy has gone through different growth path than the U.S.
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
HI US
Hawaii below US
US and Hawaii GDP growth
Hawaii opposite US
0.0
20.0
40.0
60.0
80.0
100.0
120.0
May
-05
Aug-
05N
ov-0
5Fe
b-06
May
-06
Aug-
06N
ov-0
6Fe
b-07
May
-07
Aug-
07N
ov-0
7Fe
b-08
May
-08
Aug-
08N
ov-0
8Fe
b-09
May
-09
Aug-
09N
ov-0
9Fe
b-10
May
-10
Aug-
10N
ov-1
0Fe
b-11
May
-11
Aug-
11N
ov-1
1Fe
b-12
May
-12
Aug-
12N
ov-1
2Fe
b-13
May
-13
Aug-
13N
ov-1
3Fe
b-14
May
-14
Aug-
14N
ov-1
4Fe
b-15
May
-15
Aug-
15N
ov-1
5Fe
b-16
May
-16
Aug-
16N
ov-1
6Fe
b-17
May
-17
Aug-
17N
ov-1
7Fe
b-18
May
-18
Aug-
18N
ov-1
8
U.S. Consumer Sentiment Index
____________________Source: Federal Reserve Bank of St. Louis, University of Michigan Survey of Consumers
0
0.5
1
1.5
2
2.5
3
3.5
Apr-
13M
ay-1
3Ju
n-13
Jul-1
3Au
g-13
Sep-
13O
ct-1
3N
ov-1
3De
c-13
Jan-
14Fe
b-14
Mar
-14
Apr-
14M
ay-1
4Ju
n-14
Jul-1
4Au
g-14
Sep-
14O
ct-1
4N
ov-1
4De
c-14
Jan-
15Fe
b-15
Mar
-15
Apr-
15M
ay-1
5Ju
n-15
Jul-1
5Au
g-15
Sep-
15O
ct-1
5N
ov-1
5De
c-15
Jan-
16Fe
b-16
Mar
-16
Apr-
16M
ay-1
6Ju
n-16
Jul-1
6Au
g-16
Sep-
16O
ct-1
6N
ov-1
6De
c-16
Jan-
17Fe
b-17
Mar
-17
Apr-
17M
ay-1
7Ju
n-17
Jul-1
7Au
g-17
Sep-
17O
ct-1
7N
ov-1
7De
c-17
Jan-
18Fe
b-18
Mar
-18
Apr-
18M
ay-1
8Ju
n-18
Jul-1
8Au
g-18
Sep-
18O
ct-1
8N
ov-1
8De
c-18
DJIA SP 500
Stock Market Indicators
____________________*As of 12/27/2018Source: Federal Reserve Bank of St. Louis
1,0000 for DJIA; 1,000 for SP
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
Oct
-90
Apr-
91O
ct-9
1Ap
r-92
Oct
-92
Apr-
93O
ct-9
3Ap
r-94
Oct
-94
Apr-
95O
ct-9
5Ap
r-96
Oct
-96
Apr-
97O
ct-9
7Ap
r-98
Oct
-98
Apr-
99O
ct-9
9Ap
r-00
Oct
-00
Apr-
01O
ct-0
1Ap
r-02
Oct
-02
Apr-
03O
ct-0
3Ap
r-04
Oct
-04
Apr-
05O
ct-0
5Ap
r-06
Oct
-06
Apr-
07O
ct-0
7Ap
r-08
Oct
-08
Apr-
09O
ct-0
9Ap
r-10
Oct
-10
Apr-
11O
ct-1
1Ap
r-12
Oct
-12
Apr-
13O
ct-1
3Ap
r-14
Oct
-14
Apr-
15O
ct-1
5Ap
r-16
Oct
-16
Apr-
17O
ct-1
7Ap
r-18
Oct
-18
Leading Economic Index for the United States
____________________Source: Federal Reserve Bank of Philadelphia
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
Spread GDP
Interest rate spread and economic growth(10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity )
Source: Federal Reserve Bank of St. Louis and U.S. Bureau of Economic Analysis
0.37 on 12/26/18
%
Economy 2015 2016 2017 2018 2019USA. 1.4 1.5 2.3 2.9 2.6
Canada 0.9 1.4 3.0 2.1 2.0
Japan 2.8 1.0 1.7 1.0 1.1
S. Korea 2.1 2.9 3.1 2.6 2.6
Hong Kong 1.5 2.2 3.8 3.4 2.6
Taiwan 6.7 1.4 2.9 2.6 2.2
China 6.9 6.7 6.9 6.6 6.2
United Kingdom 1.9 1.8 1.7 1.3 1.4
Germany 1.2 2.2 2.5 1.7 1.7
France 1.8 1.1 2.3 1.6 1.6
Eurozone 2.6 1.9 2.5 1.9 1.7
Australia -3.5 2.6 2.2 3.2 2.7
Brazil 1.4 -3.5 1.0 1.3 2.4
Most of the world economies will have slower growth in 2019
____________________Source: Blue Chip Economic Indicators, December 10th, 2018
Hawaii’s General Economy
-6
-5
-4
-3
-2
-1
0
1
2
3
4
520
06:1
2006
:220
06:3
2006
:420
07:1
2007
:220
07:3
2007
:420
08:1
2008
:220
08:3
2008
:420
09:1
2009
:220
09:3
2009
:420
10:1
2010
:220
10:3
2010
:420
11:1
2011
:220
11:3
2011
:420
12:1
2012
:220
12:3
2012
:420
13:1
2013
:220
13:3
2013
:420
14:1
2014
:220
14:3
2014
:420
15:1
2015
:220
15:3
2015
:420
16:1
2016
:220
16:3
2016
:420
17:1
2017
:220
17:3
2017
:420
18:1
2018
:220
18:3
Leading Index Real GDP Growth
Hawaii leading index and real GDP growth
____________________Source: Federal Reserve Bank of St. Louis, US Bureau of Economic Analysis
23.714.4
11.010.9
9.35.8
5.14.5
3.83.8
3.32.72.5
1.91.9
0.8-0.2-0.3
-0.7-1.4
-2.7
-5.0 0.0 5.0 10.0 15.0 20.0 25.0
Real estate and rental and leasingAccommodation and food services
Retail tradeHealth care and social assistanceTransportation and warehousing
Administrative and waste management servicesState and local government
Wholesale tradeManagement of companies and enterprises
ConstructionProfessional, scientific, and technical services
Finance and insuranceInformation
Arts, entertainment, and recreationManufacturing
Other services, except governmentUtilitiesMining
Agriculture, forestry, fishing, and huntingEducational services
Federal goverment
Percent of Total Growth
Sector Contribution to Real GDP Growth: 2010-2017Real GDP growth = 11.9% between 2010-2017, Real Estate sector contributed the most
____________________Source: BEA
23.011.4
10.79.4
8.88.0
6.45.8
3.32.92.82.82.7
1.91.6
1.10.5
0.20.1
-0.1-0.9
-2.3
-5.0 0.0 5.0 10.0 15.0 20.0 25.0
Accommodation and food servicesTransportation and warehousingHealth care and social assistance
ConstructionAdministrative and waste management services
Retail tradeOther services, except government
Real estate and rental and leasingArts, entertainment, and recreation
ManufacturingProfessional, scientific, and technical services
Management of companies and enterprisesState and local government
Finance and insuranceUtilities
Educational servicesFarm employment
Wholesale tradeForestry, fishing, and related activities
MiningInformation
Federal goverment
Sector Contribution to Employment Growth: 2010-2017Employment growth = 11.8% between 2010-2017, tourism sectors contributed the most to the growth
____________________Source: BEA
14.213.3
10.910.2
7.76.0
5.34.7
4.64.5
3.63.2
2.82.7
1.81.7
1.40.9
0.30.20.00.0
0.0 5.0 10.0 15.0 20.0 25.0
Accommodation and food servicesState and local government
Health care and social assistanceConstruction
Transportation and warehousingAdministrative and waste management services
Retail tradeProfessional, scientific, and technical services
Other services, except governmentFederal goverment
Real estate and rental and leasingFinance and insurance
Management of companies and enterprisesWholesale trade
ManufacturingArts, entertainment, and recreation
UtilitiesEducational services
InformationFishing, hunting, and trapping
FarmMining
Sector Contribution to Earnings Growth: 2010-2017Earnings growth = 30.1% between 2010-2017, Accommodation and food services sector contributed the most
____________________Source: BEA
-15
-10
-5
0
5
10
15
198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017
Real GET Real GDP growth
Hawaii real GET revenue and real GDP growth rates
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Non-Ag jobs Real GDP growth
Hawaii non-ag payroll jobs and real GDP growth rates
Year Overall ranking
Personal income
Population Employment
2018 46 51 48 16
2017 31 21 47 38
2016 13 8 33 6
Hawaii Ranking of Index of Economic Momentum
Source: FFIS, State Policy Reports
-7.9 -8.1
20.5 22.1
16.9 20.6
49.3 41.4
15.0 14.0
6.2 10.0
-20%
0%
20%
40%
60%
80%
100%
1998-2008 2008-2018
Contribution to Retirement Investment income Transfer receipts
Wage & Salaries Supplemental to W&S Proprietors income
Personal transfer receipts contributes more to personal income growth
Personal income growth, 5.6% a year
Personal income growth, 3.2% a year
Labor Market Conditions
Statewide labor force & employment flattening
685,550
670,150
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Labor force Employment
____________________*2018 number is November YTD numberSource: Hawaii State Department of Labor and Industrial Relations.
67.6
60.862.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Hawaii labor force participation rate increased in recent years
Source: Bureau of Labor Statistics
%
Unemployment rate has been at record low level for past 11 months and the lowest in the nation since late 2016
____________________1/ Not seasonally adjustedSource: U.S. Bureau of Labor Statistics, Hawaii State Department of Labor & Industrial Relations
0.0
2.0
4.0
6.0
8.0
10.0
12.0Ja
n-04
Apr-
04Ju
l-04
Oct
-04
Jan-
05Ap
r-05
Jul-0
5O
ct-0
5Ja
n-06
Apr-
06Ju
l-06
Oct
-06
Jan-
07Ap
r-07
Jul-0
7O
ct-0
7Ja
n-08
Apr-
08Ju
l-08
Oct
-08
Jan-
09Ap
r-09
Jul-0
9O
ct-0
9Ja
n-10
Apr-
10Ju
l-10
Oct
-10
Jan-
11Ap
r-11
Jul-1
1O
ct-1
1Ja
n-12
Apr-
12Ju
l-12
Oct
-12
Jan-
13Ap
r-13
Jul-1
3O
ct-1
3Ja
n-14
Apr-
14Ju
l-14
Oct
-14
Jan-
15Ap
r-15
Jul-1
5O
ct-1
5Ja
n-16
Apr-
16Ju
l-16
Oct
-16
Jan-
17Ap
r-17
Jul-1
7O
ct-1
7Ja
n-18
Apr-
18Ju
l-18
Oct
-18
PercentHonolulu State of Hawai'i United States
Nov. 2018 1/
United States 3.5%State 2.6%Honolulu 2.5%
624,850
662,600
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Non-ag. payroll job count continues to grow
____________________*2018 number is November YTD numberSource: Hawaii State Department of Labor and Industrial Relations.
-400
-600
-200
-100
0
100
100
200
400
400
600
600
900
2,300
2,500
4,300
-1,000 0 1,000 2,000 3,000 4,000 5,000
Retail Trade
Manufacturing
Information
Nat. Resources, Mining, Constr.
Federal Government
Educational Services
State & Local Gov.
Arts, Entertainment & Recreation
Wholesale Trade
Other Services
Transp., Warehousing, Util.
Accommodation
Financial Activities
Health Care & Social Assistance
Professional & Business Services
Food Services & Drinking Places
Statewide gained 11,100 non-ag payroll jobs in November YTD 2018
____________________Source: Hawaii State Department of Labor and Industrial Relations.
Construction and Real Estate
Value of private construction permits flat Y-T-D through November 2018
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000N
ov-0
6Fe
b-07
May
-07
Aug-
07N
ov-0
7Fe
b-08
May
-08
Aug-
08N
ov-0
8Fe
b-09
May
-09
Aug-
09N
ov-0
9Fe
b-10
May
-10
Aug-
10N
ov-1
0Fe
b-11
May
-11
Aug-
11N
ov-1
1Fe
b-12
May
-12
Aug-
12N
ov-1
2Fe
b-13
May
-13
Aug-
13N
ov-1
3Fe
b-14
May
-14
Aug-
14N
ov-1
4Fe
b-15
May
-15
Aug-
15N
ov-1
5Fe
b-16
May
-16
Aug-
16N
ov-1
6Fe
b-17
May
-17
Aug-
17N
ov-1
7Fe
b-18
May
-18
Aug-
18N
ov-1
8
Residential Commercial & Industrial Additions & Alterations
12 Month Moving Average of Building Authorizations
____________________Source: County building departments and U.S. Census Bureau.
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1,000.0
2006
:Q1
2006
:Q2
2006
:Q3
2006
:Q4
2007
:Q1
2007
:Q2
2007
:Q3
2007
:Q4
2008
:Q1
2008
:Q2
2008
:Q3
2008
:Q4
2009
:Q1
2009
:Q2
2009
:Q3
2009
:Q4
2010
:Q1
2010
:Q2
2010
:Q3
2010
:Q4
2011
:Q1
2011
:Q2
2011
:Q3
2011
:Q4
2012
:Q1
2012
:Q2
2012
:Q3
2012
:Q4
2013
:Q1
2013
:Q2
2013
:Q3
2013
:Q4
2014
:Q1
2014
:Q2
2014
:Q3
2014
:Q4
2015
:Q1
2015
:Q2
2015
:Q3
2015
:Q4
2016
:Q1
2016
:Q2
2016
:Q3
2016
:Q4
2017
:Q1
2017
:Q2
2017
:Q3
2017
:Q4
2018
:Q1
2018
:Q2
2018
:Q3
Government contract awarded increased 39.3% during first 3Qs in 2018$ mil.
Island
Single Family Homes Condo Homes
Closed sales Median price Closed sales Median price
Oahu -5.6% 4.2% -2.3% 4.9%
Maui 3.2% 2.4% 16.8% 12.1%
Hawaii -6.4% 1.4% -4.5% 12.7%
Kauai 7.8% 5.8% 12.0% 5.9%
Real estate market statistics are mixed (% change btw. Nov. 2017 YTD and Nov. 2018 YTD)
____________________Source: Hawaii Information Service on behalf of Hawaii Island Realtors and the Kauai Board of Realtors, the Honolulu Board of Realtors, and Realtors Association of Maui.
Island
Single Family Homes Condo Homes
Nov. 2017 YTD Nov. 2018 YTD Nov. 2017 YTD Nov. 2018 YTD
Oahu $758,000 $790,000 $405,000 $425,000
Maui $695,000 $712,000 $446,000 $500,000
Hawaii $350,000 $355,000 $310,500 $350,000
Kauai $668,000 $706,950 $425,000 $450,000
Median Home Prices: Nov. 2017 YTD and Nov. 2018 YTD
____________________Source: Hawaii Information Service on behalf of Hawaii Island Realtors and the Kauai Board of Realtors, the Honolulu Board of Realtors, and Realtors Association of Maui
Tourism
Visitor arrivals by air increased 6.2% during the first 11 months of 2018
400,000
450,000
500,000
550,000
600,000
650,000
700,000
750,000
800,000
850,000
900,000
950,000
1,000,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Visit
or A
rriv
als
2016
2017
2018
____________________Source: Hawaii Tourism Authority
Visitor expenditures increased 8.0% during the first 11 months of 2018
500
700
900
1,100
1,300
1,500
1,700
1,900
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Visit
or e
xpen
ditu
res
2016
2017
2018
$mil.
____________________Source: Hawaii Tourism Authority
US and Japanese visitor arrivals by air
52.0%
64.7%
32.8%16.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
*
% US Japan
____________________*First 11 monthsSource: Hawaii Tourism Authority, DBEDT
Hawaii Visitor Arrivals and Expenditures
7.0 7.3 8.0 8.2 8.3 8.7 8.9 9.4 9.9 10.1 10.3 10.4
0.0
2.0
4.0
6.0
8.0
10.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Calendar Year
$11,066 $12,158$14,365 $14,521 $14,973 $15,111 $15,911 $16,809 $18,312 $19,075 $19,771 $20,476
$0
$5,000
$10,000
$15,000
$20,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Calendar Year
Visitor Arrivals (million)
Visitor Expenditures ($million)
Millions
Millions
____________________Source: Hawaii Tourism Authority and DBEDT
MARKET 2019 2018 % change
TOTAL 9,972,392 9,925,183 0.5
US WEST 6,201,512 6,131,662 1.1
US EAST 909,988 862,886 5.5
JAPAN 1,505,958 1,526,386 -1.3
CANADA 383,362 343,038 11.8
OTHER ASIA 354,096 426,206 -16.9
OCEANIA 381,890 400,932 -4.7
OTHER 235,586 234,073 0.6
Air seats in first 9 months of 2019 on scheduled flights by market
____________________Source: Hawaii Tourism Authority
Airport 2019 2018 % change
STATE TOTAL 9,972,392 9,925,183 0.5
Honolulu 6,125,540 6,160,927 -0.6
Kahului 2,070,942 1,994,575 3.8
Kona 985,217 979,605 0.6
Hilo 34,362 42,343 -18.8
Lihue 756,331 747,733 1.1
Air seats in first 9 months of 2019 on scheduled flights by airport
____________________Source: Hawaii Tourism Authority
Indicator
Annual average growth, %
2018 2019 2020
30 years, 1987 - 2017
20 years, 1997 -2017
Real GDP 1.8 1.8 1.0 1.2 1.4
Real personal income 1.7 2.0 1.6 1.7 1.7
Honolulu inflation rate 2.8 2.2 2.0 2.3 2.5
Non-Ag wage and salary jobs 1.0 1.0 1.2 0.9 0.9
Unemployment rate 1/ 4.4 4.6 2.3 2.5 3.0
Visitor arrivals by air 1.6 1.6 5.8 1.8 1.5
Hawaii’s economy will grow at lower pace in next few years
____________________1/ Average of 30 years, 1987 – 2017.Source: DBEDT