economic outlook 2000-01 2000 efficient electro-technology conference september 7, 2000
TRANSCRIPT
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Economic Outlook 2000-01
2000 Efficient Electro-Technology ConferenceSeptember 7, 2000
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Economic Outlook 2000-01
• 2000 Year to Date * Hawai‘i economic engine firing on all cylinders.
* Alan Greenspan—carrier pilot or miracle worker?
• 2000-01 Economic Outlook* US economy still leads world wide expansion.
* Hawaii’s economic strength causes wage and price inflation.
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date: Hawai‘i Economy Roars Ahead
Visitor Industry Strong State Wide
1998 1999 2000ytdEastbound Visitors -10.9 -5.9 0.3Westbound Visitors 4.1 6.1 7.2Total Visitors -2.0 1.6 4.7Room Rates 2.9 1.3 8.2Occupancy Rate 1.6 0.8 5.6
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Honolulu County Visitor Statistics
20001999199819971996199519941993199219911990
115
110
105
100
95
90
90
85
80
75
70
OCCUPANCY RATE (right scale) ROOM RATE
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Maui County Visitor Statistics
20001999199819971996199519941993199219911990
180
170
160
150
140
130
120
85
80
75
70
65
60
OCCUPANCY RATE (right scale) ROOM RATE
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Hawai‘i County Visitor Statistics
20001999199819971996199519941993199219911990
180
160
140
120
100
72
70
68
66
64
62
60
58
56
OCCUPANCY RATE (right scale) ROOM RATE
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Kauai County Visitor Statistics
20001999199819971996199519941993199219911990
160
140
120
100
80
60
80
75
70
65
60
OCCUPANCY RATE (right scale) ROOM RATE
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date: Hawai‘i Economy Roars Ahead
Construction Sector is HOT* Real contracting expands-- fastest rate in 10 years* Single family home and condo resales strong* Average home prices rise on Oahu.* Permits growth signals continued strength
1998 1999 2000ytdReal Contracting 2.5 -1.9 17.0Total Permiting -10.6 33.0 14.8SF Avg Price (Oahu) -2.9 1.9 5.6SF Home Resales 26.0 15.0 12.2Inventory (months) 10.4 7.4 5.9
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Honolulu County Construction Permits
200019991998
80
60
40
20
0
-20
-40
-60
-80
TOTAL ADDITION&ALTERATION COMMERCIAL RESIDENTIAL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Maui County Construction Permits
200019991998
150
100
50
0
-50
TOTAL ADDITION&ALTERATION COMMERCIAL RESIDENTIAL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Hawai‘i County Construction Permits
200019991998
150
100
50
0
-50
TOTAL ADDITION&ALTERATION COMMERCIAL RESIDENTIAL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Kauai County Construction Permits
200019991998
100
50
0
-50
-100
TOTAL ADDITION&ALTERATION COMMERCIAL RESIDENTIAL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Oahu Inventory Remaining
Source: Honolulu Board of Realtors
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date: Hawai‘i Economy Roars Ahead
Job Growth Strongest in 10 years* Contracting and Oahu lead strong job growth
* Employment growth continues to exceed job growth
* Unemployment rate near US rate lower than CA
1998 1999 2000ytdNon Ag Jobs -0.1 0.5 2.0Employment 0.2 0.7 3.2Unemployment Rate 6.2 5.6 4.5
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Total County Job Growth
200019991998
4
3
2
1
0
-1
OAHU MAUI HAWAII KAUAI
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Honolulu County Job Growth Returns
200019991998
6
4
2
0
-2
-4
-6
NON-AG CONTRACTING SERVICE RETAIL HOTEL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Maui County: Contracting Jobs Surge
200019991998
25
20
15
10
5
0
-5
NON-AG CONTRACTING SERVICE RETAIL HOTEL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Hawai‘i County: Contracting Booming
200019991998
50
40
30
20
10
0
-10
NON-AG CONTRACTING SERVICE RETAIL HOTEL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Kauai County: Growth in Retail & Hotels
200019991998
8
6
4
2
0
-2
-4
-6
-8
NON-AG CONTRACTING SERVICE RETAIL HOTEL
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
County Unemployment Rates Decline
200019991998
10
9
8
7
6
5
4
3
OAHU MAUI HAWAII KAUAI
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date: Hawai‘i Economy Roars Ahead
Expanding Economy Grows Real Tax Base
* Retail & Hotel tax base grow with visitor industry
* Wage income growing at over 6%
* GE tax base expanding more rapidly than income
1998 1999 2000ytdRetail -1.2 0.3 9.1Hotel Room -0.1 -0.6 12.2Contracting 2.7 -1.8 17.0Total GE Tax Base -1.2 0.8 10.3
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date: Hawai‘i Economy Roars Ahead
Income Growth and Prices * Nominal income grew by more than 4% in Q1 while
wages grew by almost 9%.
* Inflation returns as expected
* Withholding Taxes increase more than 4%
1998 1999 2000ytdCPI Inflation -.3 1.1 1.8Real Income 2.7 2.2 2.6Witholding Taxes NA NA 4.5
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date:Is the Landing Gear Down?
• US Energizer Bunny expansion continues to set records 112 months and still going strong
• Necessary ingredients for soft landing:* No mistakes by Fed!
* Continued productivity growth
* Slowing consumer demand (aka less than 20% annual return on Nasdaq!)
* Some easing of labor markets
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date:Is the Landing Gear Down?
Soft landing pluses* CPI inflation only 3.5% through July.* Productivity up 5.1% over past year—biggest annual
gain in 17 years.* July housing starts declined to 1.51 million annual rate
lowest level since Nov. 1997.* US unemployment rate inched up in August to 4.1%* NAPM index declined in August—factory orders
posted largest decline ever in July, falling 7.5%.* Index of leading economic indicators down for third
straight month in July. * Sales of existing homes fell 9.8% in July (higher
mortgage rates).
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000 Year to Date:Is the Landing Gear Down?
Soft landing minuses* CPI inflation 3.5% through July. * Real GDP grew at an annual rate of 5.3% in 2nd Qtr.* Industrial production is up 5.8% over last year through
June.* New orders for durable goods up 9.9% over last year.* Sales of new homes jumped 15% in July, the largest
increase in more than 7 years.
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000-01 OutlookUS still Leads World Economic Growth
20012000199919981997
5
4
3
2
1
0
-1
-2
-3
World US Japan
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000-01 NASDAQ Growth Forecast
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000-01 Outlook:All Sectors Contribute to Growth
• Visitor growth expected near 5 %• Real contracting will expand at near 15 % rate• Job and employment growth continue at 2-3%• Real income to grow over 3%• Inflation will accelerate to 2.3% rate and beyond
with rising rents.
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Visitor Arrivals Growth to Remain Strong
2001200019991998199719961995199419931992199119901989
20
15
10
5
0
-5
-10
-15
Eastbound Westbound Total
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Expected Contracting Growth Strongest in 10 years
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Labor Market Firm—Shortages?
2001200019991998199719961995199419931992199119901989
6
4
2
0
-2
-4
Jobs Employment
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Real Income Growth Strengthens
2001200019991998199719961995199419931992199119901989
5
4
3
2
1
0
-1
-2
-3
Real Income Real Gross State Product
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
Honolulu Inflation Catches US Rate
2001200019991998199719961995199419931992199119901989
8
6
4
2
0
-2
Honolulu US
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UHERO Quarterly Economic Outlook http://www2.hawaii.edu/~UHERO
2000-01 Outlook
1998 1999 2000 2001Personal Income (Current $) 1.8 3.5 5.5 5.8Real Personal Income 2.1 2.4 3.3 3.0Real Gross State Product 2.2 2.4 3.0 3.1
Consumer Price Inflation -0.3 1.1 2.2 2.8
Visitor Arrivals -2 1.6 4.9 4.0East Bound -10.9 -5.9 0.9 2.4West Bound 4.1 6.1 7.0 4.8
Real Contracting 2.7 -1.9 15.0 10.0
Non Ag Jobs -0.1 0.5 2.0 2.2Employment 0.2 0.7 2.7 2.1