Pearl Imada IboshiPearl Imada Iboshi

Department of Business, Economic Department of Business, Economic Development & TourismDevelopment & Tourism

Current Hawaii Economic Conditions

August 21, 2009August 21, 2009

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

1978 1982 1986 1990 1994 1998 2002 2006 2010

Real product, 1978 to 2012 (% change from previous year)

2008-9 have been challenging times for Hawaii

Source: US Bureau of Economic Analysis and Hawai‘i State Department of Business, Economic Development and Tourism

The sharp decrease in jobs is unprecedented

Source: Hawaii State Department of Labor and Industrial Relations and Department of Business, Economic Development & Tourism

500,000

520,000

540,000

560,000

580,000

600,000

620,000

640,000

660,000

1990

.1

1991

.1

1992

.1

1993

.1

1994

.1

1995

.1

1996

.1

1997

.1

1998

.1

1999

.1

2000

.1

2001

.1

2002

.1

2003

.1

2004

.1

2005

.1

2006

.1

2007

.1

2008

.1

2009

.1

Pers

ons

& N

um

ber of Jo

bs

Year

Hawaii has lost 29,100 jobs in the last Hawaii has lost 29,100 jobs in the last two yearstwo years

Source: Hawaii State Department of Labor and Industrial RelationsThrough 2nd Quarter 2009

Total Wage & Salary Total Wage & Salary JobsJobs

638,350 (4638,350 (4thth Quarter Quarter 2007)2007)

609,250 (2609,250 (2ndnd Quarter Quarter 2009)2009)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

Perc

ent

Unemployment Rates - 2000 to 2009*

Our unemployment rate has also jumped, Our unemployment rate has also jumped, but remains below the U.S. averagebut remains below the U.S. average

* Though June 2009, Not seasonally adjusted.

United StatesUnited States

HawaiiHawaii

Source: Bureau of Labor Statistics

-8.5%

0.3%

2.6%

5.3%

5.9%

6.5%

6.8%

9.3%

9.6%

9.8%

11.2%

13.2%

13.8%

24.1%

39.9%

-20.00% -10.00% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Agriculture

Federal Government

State Government

Finance & Insurance

Local Government

Real Estate & Rental & Leasing

Accommodation

Retail Trade

Professional & Business Services

Total WAGE & SALARY JOBS

Health Care & Social Assistance

Food Services and Drinking Places

Education Services

Transportation & Warehousing

Natural resources, mining, construction

From 2003 to 2007, the From 2003 to 2007, the sstrongest trongest ggrowth was in rowth was in cconstruction and onstruction and ttransportationransportation

Growth in Jobs

2003 to 2007

Source: Hawaii State Department of Labor and Industrial Relations

3,100

750

-2,350-2,550 -2,550

-3,350 -3,450

-4,750

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

Government Health Care & Social Assistance

Professional & Business services

Food Services & Drinking Places

Retail Trade Accommodations Transp., Warehousing,

Util.

Nat. Resources & Mining & Construc.

Nu

mb

er

of J

ob

s

Source: Hawaii State Department of Labor and Industrial Relations

In 2009, the largest decreases have been in In 2009, the largest decreases have been in construction and visitor-related industriesconstruction and visitor-related industries

2.5%

1.3%

-3.1%-4.4%

-8.6% -11.1%

-12.3%

Total Wage & Salary Jobs: -19,750 (-3.1%)

-3.6%

(2009 Year to Date Job (2009 Year to Date Job Growth)Growth)

$0$20$40$60$80

$100$120$140$160$180$200

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

$ Milli

ons

ResidentialCommercial & IndustrialAdditions and Alterations

* Additions and Alterations and Commercial & Industrial data do not include Kauai. All data through April 2009 Source: County building departments.

12-Month Moving Average of Building Authorization Components*

The value of private building permits continues to fall

100

200

300

400

500

600

700

800

900

Jan-9

5

Jan-9

6

Jan-9

7

Jan-9

8

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Monthly Construction Tax Base in millions $US 1990-2009

Through June 2009Through April 2009

Construction Put-in-Place and Jobs Decline

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

State of Hawaii Construction Jobs Monthly 1990-2009

Source: Hawai‘i State Department of Taxation and Hawai‘i State Department of Labor and Industrial Relations

Federal expenditures will continue to increase as planned military housing privatization is substantial at $3.0 billion over the next ten years– Encompassing 15,000 units (approx. 3,900

replacement/renovated units through CY 2008, and 1,400 planned for each of the next few years.)

Federal spending has helped to cushion the decrease in private construction

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2002 2003 2004 2005 2006 2007 2008 2009

State Government capital State Government capital improvement projects (CIP) improvement projects (CIP)

expenditures increaseexpenditures increaseIn thousands of Dollars

Source: State of Hawaii Department of Accounting and General Services

Through 1Q 2009

The Visitor industry has increased its The Visitor industry has increased its importance in Hawaii’s Economy since importance in Hawaii’s Economy since

Statehood Statehood

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Job C

ount

Year

Note: Federal job count includes civilian employees but not enlisted militarySource: Department of Business, Economic Development & Tourism Databook, Department of Labor & Industrial Relations, Annual Labor Force Estimates.

Hotel

Federal

Agriculture

Job count, State of Hawaii, 1955-2005

The fall in visitor arrivals in 2008 and 2009 The fall in visitor arrivals in 2008 and 2009 has been dramatic has been dramatic

International

Domestic

Total

Source: Hawai‘i State Department of Business, Economic Development and Tourism

Visitor Arrivals to Hawaii: 1951 to 2008Visitor Arrivals to Hawaii: 1951 to 2008

Visitor arrivals continued to fall in Visitor arrivals continued to fall in the first half of 2009, but are the first half of 2009, but are

beginning to stabilizebeginning to stabilize

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Visito

rs

Total Visitor Arrivals by air 2007 to 2009

2007

2008

2009

Source: Hawai‘i State Department of Business, Economic Development and Tourism

Through July 2009

Short-term & Long-term visitor Short-term & Long-term visitor projectionsprojections

Visitor arrival growth may be affected by modest long term

growth path

$9,844

$10,648

$11,650

$12,243

$12,578

$11,182

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

13,000

2003 2004 2005 2006 2007 2008

Visitor expenditures have fallen more than Visitor expenditures have fallen more than arrivalsarrivals

Hawai‘i State Department of Business, Economic Development and Tourism

(in million of $US)

8.2% 9.4% 5.1%

Year over Year

Growth2.7% -11.1%

Year over Year

Growth

Year over Year

Growth

Year over Year

Growth

Year over Year

Growth

Total Annual Visitor Expenditure (Arrivals by Air): 2003 to 2008Total Annual Visitor Expenditure (Arrivals by Air): 2003 to 2008

Scheduled airseats now at 2008 Scheduled airseats now at 2008 levelslevels

500,000

550,000

600,000

650,000

700,000

750,000

800,000

850,000

900,000

950,000

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2008

2009

2008

Source: ADI Global Airport Industry Database / OAG Schedule Detail

Scheduled Airseats 2008 & Scheduled Airseats 2008 & 20092009

Blue Chip Forecast for U.S. and Japan Real GDP Growth

2008 2009 2010

United States

0.4 -2.6 2.3

Source: Blue Chip Forecast, August 2009

2008 2009 2010

Japan -0.7 -6.2 1.3

External ConditionsExternal Conditions

Summary of Actual and Forecasted Key Economic Indicators for Hawaii: CY 2007 to 2009

(Annual % Change)

ActualCY 2008

ForecastedCY 2009

ForecastedCY 2010

Total Population 0.8% 0.8% 0.8%

Visitor Arrivals -10.6% -5.9% 1.2%

Visitor Expenditures -11.0% -11.5% 2.9%

Honolulu CPI-U 4.3% 0.6% 1.5%

Personal Income 4.0% 1.0% 1.5%

Real Personal Income -0.2% 0.4% 0.0%

Total Wage and Salary Jobs -1.0% -3.0% -0.4%

Source: Department of Business, Economic Development & Tourism

Projected Other Civilian Population and Growth to 2035,

By Selected Age Groups

Substantial numbers of people will be leaving the Labor Force in the future

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