Gary's Blog

Thursday, September 16, 2010

More Good News for Maui

We get enough bad news on Constant Negative News (aka CNN), right? Even on Maui News, I have to dig to find the positive side of each article. Bad news sells.

Well, I am going out on a limb, in hopes that my readers actually want to hear good news! So here it is.

Maui visitor counts are up 11.5%! For the first time in a long tie, the monthly visitor count topped 200,000 in July, according to the Hawaii Tourism Authority. Maui visitors from Canada were up 22.2%.

This is amazing, considering Hawaii hotel rates are the third highest in the U.S., behind New York and Massachusetts, according to Hotels.com. The average nightly rate in Hawaii is $141(unchanged from 2009), compared to $193 in New York (up 8%) and $152 in Massachusetts (up 3%).

According to professor Leroy Laney, who teaches finance and economics at Hawaii Pacific University, tourism is leading Maui out of the recession. (This statement is confirmed by the state Department of Taxation report showing that transient accommodations tax increased in the past two months by nearly 25%, compared to the same period one year ago.)

Laney pointed to credit card spending growth of the 300 largest customers at First Hawaiian Bank. In 2009, credit card charge volume fell 6%. So are this year, through June, volume is up 6%. These numbers are supported by consumer confidence reports.

Consumer confidence, according to the Commerce Board, improved to 53.5 from 51 the month before. As consumer spending accounts for 70% of our economic activity, it is important that consumers are confident. This figure has been recovering consistently since hitting an all-time low of 25.3 in February 2009.

Mortgage rates, oh my gosh! Down to 4.32% on a 30-year fixed, with zero points! Maui real estate prospective buyers seem to be taking advantage of the low prices and low rates. There are 222 single family homes and 262 condos in escrow as of this writing. And as of this writing, 862 Maui condo sales have closed this year, and 573 single family home sales have closed this year!

And retail sales also confirm increased consumer confidence, as we saw retail sales up 0.4% in August, the best in five months. Excluding auto sales, that number was up 0.6%.

Hawaii's umemployment rate is holding steady, at 6.3%, the same as it was in June. Hawaii is continuing to see gradual improvement in employment. There were 40,250 unemployed in the islands in July, down from 44,750 last year.

The Commerce Department said last Friday that wholesale inventories rose 1.3% in July, triple the increase expected. That makes seven months in a row that that number increased. Sales at the wholesale level increased 0.6%, double the expected number.

New applications for uneployment insurance fell last week to the lowest level in two onths.

The U.S. trade deficit shrank in July as exports rose to the highest level in nearly two years.

The Institute for Supply Management said the manufacturing index rose to 56.3 in August from 55.5 in Juyly. A reading above 50 indicates growth. This index has surged since late 2009. Job gains at industrial companies have made up about 30% of net hiring by businesses and other private organizations in 2010. The survey also showed managers' desire to hire increased to 60.4- the strongest level since December 1983.

Hawaii bankruptcies are down. 329 in August, compard to 345 in July.

Productivity, or output per hour worked, fell by the largest amount in nearly four years, while labor costs rose. This is good news for people looking for work. Once businesses have seemingly gotten everything they can out of their workers, productivity begins to drop. Next comes job creation.

We are just starting to see evidence of same. Private employers added a net totalof 67,000 jobs in August.

With all this good news, it is easy to believe that we have seen the worst of the most recently passed downturn.

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