State of the Economy
2nd Quarter 2020 Report
Hawaii’s major economic indicators were mixed in the first quarter of 2020. Wage and salary jobs, personal income (through the fourth quarter of 2019), private building authorizations, and State general fund tax revenues all increased in the quarter compared to the first quarter of 2019. Visitor arrivals and visitor expenditures decreased in the quarter.
In the first quarter of 2020, the total number of visitors arriving by air to Hawaii decreased 406,942 or 16.3 percent. Due to shorter lengths of stay, the daily visitor census decreased 17.8 percent in the quarter. Since visitors spent more on a daily basis in the first quarter of 2020, total visitors by air spending decreased 14.2 percent in the quarter.
In the first quarter of 2020, jobs in the construction sector increased 1.9 percent or 700 jobs, the government contracts awarded increased from negative $70.7 million to positive $760.8 million, the permit value for private construction increased $23.8 million or 3.1 percent, compared with the same quarter of 2019. According to the most recent excise tax base data available, current construction put-in-place increased $153.7 million or 1.6 percent in 2019, compared with the previous year.
In the first quarter of 2020, State general fund tax revenues were up $102.9 million or 6.1 percent over the same period of 2019. The net individual income tax revenues increased $35.8 million or 6.8 percent, the state general excise tax revenue increased $54.9 million or 6.0 percent, the transient accommodations tax (TAT) increased $30.0 million or 17.9 percent, but the net corporate income tax revenues decreased $42.4 million or 242.4 percent. In 2019, State general fund tax revenues increased $383.5 million or 5.5 percent, and state general excise tax revenue increased $175.7 million or 5.1 percent, compared to the previous year.
Labor market conditions were mostly positive. Hawaii’s jobs increased for the 38th consecutive quarter beginning in first quarter 2010. In the first quarter of 2020, Hawaii’s non-agricultural wage and salary jobs averaged 657,700 jobs, an increase of 200 jobs or 0.03 percent from the same quarter of 2019. Note: The survey data for the reference week ending March 14 used to develop the March 2020 Hawaii labor market statistics precedes, and therefore does not reflect, the economic impacts being experienced now due to the spread of COVID-19 in Hawaii.
In this quarter, the private sector lost about 700 non-agricultural jobs compared to the first quarter of 2019. Jobs increased the most in Food Services and Drinking Places, adding 800 jobs or 1.1 percent; followed by Natural Resources, Mining & Construction, adding 700 jobs or 1.9 percent, Transportation, Warehousing & Utilities, adding 600 jobs or 1.8 percent, and Health Care & Social Assistance, adding 600 jobs or 0.8 percent in the quarter. For the private sector, in the first quarter of 2020, Retail Trade lost 1,600 jobs or 2.2 percent, and Information lost 800 jobs or 8.7 percent in the quarter. The three levels of government added 900 jobs or 0.7 percent in the first quarter of 2020 compared to the same quarter of 2019. The Federal Government added 600 jobs or 1.8 percent, State Government added 200 jobs or 0.3 percent, and Local Government lost 100 jobs or 0.5 percent, compared to the first quarter of 2019.
In the fourth quarter of 2019, total annualized nominal GDP increased $3,168 million or 3.3 percent, from the fourth quarter of 2018. In 2019, total annualized nominal GDP increased $3,484 million or 3.7 percent from the previous year. In the fourth quarter of 2019, total annualized real GDP (in chained 2012 dollars) increased $708 million or 0.9 percent from the fourth quarter of 2018. In 2019, total annualized real GDP increased $858 million or 1.0 percent from the previous year.
In the fourth quarter of 2019, total non-farm private sector annualized earnings increased $1,136.3 million or 2.9 percent from the fourth quarter of 2018. In dollar terms, the largest increase occurred in accommodation and food services; followed by health care and social assistance, transportation and warehousing, finance and insurance, and other services. During the fourth quarter of 2019, total government earnings increased $440.2 million or 2.7 percent from the same quarter of 2018. Earnings from the federal government increased $319.5 million or 3.6 percent. Earnings from the state and local governments increased $120.7 million or 1.7 percent in the quarter.
In the second half of 2019, Honolulu’s Consumer Price Index for Urban Consumers (CPI-U) increased 1.3 percent from the same period in 2018. This is 0.6 of a percentage point below the 1.9 percent increase for the U.S. average CPI-U and is lower than the second half of 2018 Honolulu CPI-U increase of 2.1 percent from the same period of the previous year. In the second half of 2019, the Honolulu CPI-U increased the most in Apparel (11.5 percent), followed by Other Goods and Services (2.1 percent), Housing (1.8 percent), Food and Beverages (1.7 percent), and Education and Communication (o.1 percent). The price of Transportation decreased 2.2 percent and the price of Recreation decreased 0.5 percent compared to the second half of 2018.