State of the Economy

3rd Quarter 2021 Report

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Hawaii’s major economic indicators were mainly positive in the second quarter of 2021. Visitor arrivals, wage and salary jobs, State general fund tax revenues, and private building authorizations all increased in the quarter compared to the second quarter of 2020. Government contracts awarded decreased in the quarter.

In the second quarter of 2021, the total number of visitors arriving by air to Hawaii increased 1,874,057 or 6,094.9 percent.   The daily visitor census increased 2,062.7 percent in the quarter.

In the second quarter of 2021, jobs in the construction sector increased 4.5 percent or 1,600 jobs compared with the same quarter of 2020. The government contracts awarded totaled $274.9 million, a decrease of $307.5 million in the second quarter of 2021. In the second quarter of 2021, the permit value for private construction increased $652.7 million or 94.2 percent compared with the same quarter of 2020. According to the most recent excise tax base data available, current construction put-in-place decreased $128.8 million or 5.2 percent in the first quarter of 2021, compared with the same quarter of the previous year.

In the second quarter of 2021, State general fund tax revenues were up $1,017.9 million or 74.0 percent over the same period of 2020. The net individual income tax revenues increased $660.7 million or 125.1 percent, the state general excise tax revenue increased $219.3 million or 32.4 percent, net corporate income tax revenues changed from a negative $6.2 million in the second quarter of 2020 to a positive $115.8 million, and the transient accommodations tax (TAT) increased $70.1 million or 147.6 percent. In the first half of 2021, State general fund tax revenues increased $819.2 million or 25.9 percent compared to the same period of the previous year.

Labor market conditions were all positive. In the second quarter of 2021, Hawaii’s non-agricultural wage and salary jobs averaged 567,700 jobs, an increase of 52,300 jobs or 10.1 percent from the same quarter of 2020.

In this quarter, the private sector added about 49,200 non-agricultural jobs compared to the second quarter of 2020. Almost all private sectors added jobs in the quarter. Jobs increased the most in Food Services and Drinking Places, which added 17,800 jobs or 49.6 percent; followed by Accommodation, which added 10,400 jobs or 60.1 percent, Professional & Business Services, which added 6,000 jobs or 9.5 percent, Retail Trade, which added 3,400 jobs or 6.1 percent, and Transportation, Warehousing & Utilities, which added 3,300 jobs or 13.9 percent in the quarter. The Government sector added 3,100 jobs or 2.7 percent in the second quarter of 2021 compared to the same quarter of 2020. The Federal Government lost 800 jobs or 2.3 percent, the State Government added 3,600 jobs or 5.7 percent, and the Local Government added 300 jobs or 1.6 percent, compared to the second quarter of 2020.

In the first quarter of 2021, total annualized nominal GDP decreased $2,824 million or 3.0 percent, from the first quarter of 2020. In 2020, total annualized nominal GDP decreased $5,888 million or 6.1 percent from the same period of the previous year. In the first quarter of 2021, total annualized real GDP (in chained 2012 dollars) decreased $4,183 million or 5.2 percent from the first quarter of 2020. In 2020, total annualized real GDP decreased $6,609 million or 8.0 percent from the previous year.

Turning to personal income, in the first quarter of 2021, total non-farm private sector annualized earnings decreased $2,974.1 million or 7.2 percent from the first quarter of 2020. In dollar terms, the largest decrease occurred in accommodation and food services; followed by transportation and warehousing; arts, entertainment, and recreation; retail trade; and administration and management services. Increases were seen in health care and social assistance, construction, finance and insurance, and professional, scientific, & technical services. During the first quarter of 2021, total government earnings increased $2.4 million or 0.01 percent from the same quarter of 2020. Earnings from the federal government increased $195.6 million or 2.1 percent. Earnings from the state and local governments decreased $193.2 million or 2.6 percent in the quarter.

In the first half of 2021, Honolulu’s Consumer Price Index for Urban Consumers (CPI-U) increased 2.6 percent from the same period in 2020. This is 0.8 of a percentage point below the 3.4 percent increase for the U.S. average CPI-U but is higher than the first half of 2020 Honolulu CPI-U increase of 1.6 percent from the same period of the previous year. In the first half of 2021, the Honolulu CPI-U increased the most in Transportation (7.2 percent), followed by Other Goods and Services (4.8 percent), Food and Beverages (4.1 percent), Education and Communication (3.6 percent), and Housing (1.8 percent). The price of Apparel decreased 5.5 percent; and the price of Recreation decreased 0.4 percent compared to the first half of 2020.