About this Kauai Local Economy Report:
The contents of the Kauai Local Economy Report, found below, are an excerpt from my comprehensive, 20-page 2014 Year-End Kauai Real Estate Market Report. If you would like to request either a PDF copy or hard copy of the full report, you can can do so by clicking here:[sws_button class=”” size=”sws_btn_small” align=”” href=”http://kauairealestatesolutions.com/kauai-real-estate-market-reports/” target=”_blank” label=”Request 2014 Year-End Kauai Real Estate Market Report” template=”sws_btn_default” textcolor=”” fontweight=”normal” bgcolor=”” bgcolorhover=”” glow=”sws_btn_glow” btnwidth=”” textalign=””] [/sws_button]
The Tourism Industry
The Tourism, or visitor sector of the economy in Hawaii has long been the primary source of income for the state of Hawaii at large, and the same is true of its significance in the Kauai local economy. The tourism industry is tracked in the category of “Export Industries,” and according to the Hawaii Department of Business, Economic Development & Tourism, tourism is the largest “export” in the state, ahead of defense, raw sugar and molasses, and fresh and processed pineapple.
As reported by the Hawaii Tourism Authority, a record 8.3 Million visitors came to the state of Hawaii in 2014, helping to grow Total Visitor Expenditures to $14.7 Billion, a 2.3% increase over 2013 expenditures, as well as a substantial 14.8% increase over the $12.8 Billion total realized before the economic downturn, back in 2006/2007. The total amount of visitors by air increased by 1.95% in 2014, assisted largely by increases in the number of visitors from Canada and both the US West and US East regions. Though smaller in total number, double-digit percent increases in the number of visitors were realized from China (29%), New Zealand (26%), and France (10%).
Total visitor expenditures on the island of Kauai, specifically, rose approximately 5.4% in 2014, helping to boost the Kauai local economy despite a very minor decrease in the total number of visitors to the island, and also despite a 4.7% increase in the number of people that visited Kauai only as a day-trip, which was a contributing factor towards a slight reduction in the average length of stay of visitors on Kauai in 2014.
Population & Employment
According to a US Census Bureau 2013 estimate, the resident population of the state of Hawaii is 1,404,054, with the population of Kauai being approximately 5% of that total, or 69,512 people. Kauai’s resident population has very steadily grown over the last 40+ years, and is now approximately 2.3x greater than it was back in 1970. Kauai’s population has grown by a minimum of 550 people per year, every year for all but one of the last 12 years (in 2006 it grew by 360 people), including the largest single-year population increase on record back in 2010, when an estimated 2,655 new people moved to the island of Kauai.
Thinking about where the population of Kauai may be headed, the Hawaii Department of Business, Economic Development and Tourism (DBEDT) previously set forth their projections for population growth and the corresponding impacts on the Kauai local economy, back in a report issued in March of 2012. In their projections they forecast a steady average rate of growth of approximately 800 new people per year for the next 25 years, resulting in a projected population of 93,000 in the year 2040.
The good news for the Kauai local economy, regarding the increase in population on the island this year, is that it corresponds with very positive employment trends, overall. The current unemployment rate on Kauai is 4.3% (not seasonally adjusted), a full 17.3% lower than the 5.2% rate realized one year ago, though still higher than the very low 3.7% unemployment rate for the state of Hawaii at large. The greatest number of jobs gained on Kauai this year were in the Professional & Business Services sector, where 600 jobs were added, followed by the Non-Agricultural Wage & Salary sector with 400 added jobs, then the Government sector, State sector and Retail sector, all with 200 added jobs. The Healthcare sector and Accommodation sectors both realized increases in job growth, as well, with 100 new jobs added. Many sectors reported no change, including the Federal, Entertainment, Financial Activities, Wholesale Trade and Manufacturing sectors. The Natural Resources & Mining sector reported the largest net loss in jobs this year, losing 300 jobs, followed by the Information sector, Education sector and Food Services sector, each reporting a loss of 100 jobs.
Housing & Development
Following a meteoric rise in construction activity in 2005 to 2008, during the boom of the Kauai local economy, new development and annual construction expenditures curtailed significantly throughout the economic downturn of 2009 to 2011. In fact, in 2011, annual construction expenditures from privately owned residential building permits were $55.9 Million, a paltry 19% of the $288.3 Million in expenditures realized during the peak, in 2006. In 2014, an estimated $102.2 Million in construction expenditures occurred, a 19.65% increase compared to the $85 Million realized in 2013. This marks the third straight year of increases in construction and development on the island. This year’s activity is a much more normalized amount of activity, historically, and is generally seen as a positive indicator pointing towards the return to a healthy real estate market and, overall, an increasingly healthier Kauai local economy.
* All data provided in this Kauai Local Economy Report has been provided by third party sources that are deemed to be reliable but the accuracy of which cannot be guaranteed.