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Retail spending
in Hawaii tops
nation again

Check purchases in May
increased 5.3% over the previous
year, a survey says

By Russ Lynch
Star-Bulletin

Once again in May, Hawaii recorded the strongest growth in retail spending in the nation, keeping the top position it has held since the start of the holiday shopping season last Thanksgiving, a survey released today shows.

May figures for purchases paid for by checks show Hawaii with 5.3 percent growth over May 1999, according to national check-authorizing company TeleCheck Services Inc.

That was 1.3 percentage points above the national growth rate of 4 percent and slightly above second-place Maryland, which showed a year-over-year growth of 5 percent.

"It's a clear indicator of higher consumer patterns," said economic consultant David H. Ramsour, a former Bank of Hawaii chief economist.

There are a number of reasons why retail shopping goes up, he said. Clothes and appliances wear out, for example. "But I would suspect it has a lot to do with income improvement," said Ramsour, who added that he agreed with TeleCheck that same-store, year-over-year changes in purchases paid for by check make a good indicator of overall retailing.

TeleCheck, which is based in Houston but started in Honolulu, says checks make up about one-third of all retailing revenues.

Ramsour said the national growth rate has been high for about four years, soaring beyond a sustainable level, and it has to come back to "cruising altitude." Hawaii, caught in a slump for years, is on the way up and will continue to climb, he predicted.

According to TeleCheck numbers, Hawaii has led the nation in year-over-year sales growth since late November, the traditional start of the holiday shopping season. The latest numbers reinforce earlier information from state officials about job and revenue growth in Hawaii retailing, which show the state's economy beginning to pick up while the national economy continues to grow but at a slower pace than in recent years.

The number of jobs in island retailing, a clear indication of the health of the industry, is running 2.2 percent ahead of last year, according to the state Department of Labor & Industrial Relations' average for the first four months of the year.

Retailing revenues in the islands were up 6.6 percent from a year earlier for the five months from November through March, the latest figures from the state's Department of Taxation show.

Thanks to the retail sales growth, a rise in personal income, and an increase in tourist traffic, the Hawaii Council on Revenues recently revised its growth estimate for state tax revenues for the fiscal year through June 30 to 3 percent.

As recently as March, the panel of economists had a no-growth forecast for Hawaii tax revenues.