State of the Economy
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4th Quarter 2009
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Hawaii’s economy continued to slow through the third quarter of 2009, due to continued weak national and local economic conditions and the decline of visitor expenditures in Hawaii. Wage and salary jobs in the third quarter decreased substantially from the year before, mainly due to job losses in the private sector. The increase in Federal government jobs was offset by a decrease in State government jobs. Total civilian employment also decreased significantly. Combined with a small decrease in the civilian labor force, the number of unemployed and the unemployment rate jumped substantially from the same quarter in 2008. Visitor arrivals and average daily census both increased slightly; however, visitor expenditures decreased substantially in the quarter. New private building authorizations, the value of government contracts awarded, and total tax collections distributed to the State general fund revenues all declined substantially for the quarter.
Civilian labor force in Hawaii decreased in the third quarter of 2009 to 646,650, a decrease of 8,850 people or 1.4 percent from the third quarter of 2008. The civilian employment also decreased 27,100 people or 4.3 percent from the same quarter in 2008. At the same time, the average number of civilian unemployed for the quarter jumped to 47,100, 63.5 percent higher than the year before. This pushed the unemployment rate up to 7.3 percent in the third quarter of 2009, compared with 4.4 percent a year earlier. In the first three quarters of 2009 (Year-to-Date or YTD), the unemployment rate averaged 7.0 percent, 3.4 percentage points higher than that of 2008.
In the third quarter of 2009, civilian wage and salary jobs in Hawaii averaged 595,900, a decrease of 21,200 jobs or 3.4 percent from the same quarter of 2008. YTD in 2009, average wage and salary jobs in Hawaii decreased 3.2 percent from the same period of 2008. The third quarter 2009 increases in Federal and Local government jobs were almost completely offset by the losses in State government jobs. Among the private sectors, only Health Care and Social Assistance and Educational Services experienced small job growth; all other private industries suffered significant job losses in the third quarter of 2009 compared to the same quarter last year. Natural Resources, Mining and Construction lost the most jobs (5,300 jobs or 14.0 percent), followed by Retail Trade (lost 3,000 jobs or 4.3 percent), Food Services and Drinking Places (lost 2,600 jobs or 4.5 percent), Accommodation (lost 2,350 jobs or 6.3 percent), and Transportation, Warehousing, and Utilities (lost 1,350 jobs or 4.8 percent).
According to the most recent data available, in the second quarter of 2009, total personal income before adjusting for inflation decreased $230 million or 0.4 percent from the same quarter of 2008. The $899 million or 12.1 percent increase in Personal Current Transfer Receipts was more than offset by the $675 million or 2.3 percent decrease in Wage and Salary Disbursements and the $662 million or 6.7 percent decrease in Dividends, Interest, and Rent. For the first half of 2009, total nominal personal income decreased 0.1 percent or $44 million from the same period of 2008.
In the first half of 2009, Honolulu’s consumer price index increased 0.3 percent – 4.6 percentage points lower than the increase in the first half of 2008, due largely to lower price for transportations.
In the third quarter of 2009, total tax collections distributed to the State general fund totaled $1,051.8 million, a $109.7 million or 9.4 percent decrease over the third quarter of 2008. General Excise and Use Tax (GET) revenues totaled $577.8 million, a decrease of $77.2 million or 11.8 percent. Net Individual Income Tax revenues decreased $25.8 million or 6.7 percent. Net Corporate Income Tax revenues and Transient Accommodations Tax revenues decreased $4.7 million and $7.1 million, respectively. YTD in 2009, total tax revenue collections distributed to the State general fund decreased $517.9 million or 14.7 percent over the same period of 2008.
In the third quarter of 2009, total number of visitors arriving by air to Hawaii increased 2.7 percent, compared to the same quarter last year. Slightly shorter length of stay caused a smaller increase of 2.2 percent in the average daily census. However, sharp declines in average daily visitor spending caused a 10.3 percent decrease in the nominal visitor expenditures. YTD in 2009, visitor arriving by air, average daily census, and visitor expenditures decreased 5.9 percent, 4.9 percent, and 14.6 percent, respectively, from the same period last year.
The indicators of Hawaii’s construction industry were mostly negative in the third quarter of 2009. Construction jobs showed a significant decline from the same quarter last year, down 14.0 percent or 5,300 jobs. The value of private building authorizations decreased $131.2 million or 19.0 percent compared to the same quarter of 2008. The value of government contracts awarded decreased $118.0 million or 33.5 percent in the third quarter. In the existing Honolulu housing market for both single-family and condominium units, the median resale prices were down but the numbers of units resold were up in the third quarter of 2009 compared to the same quarter last year.