Card purchases increase 6.3 percent

Hawaii economists have been forecasting slow to moderate growth in the state for the past year. Consumers, though, have been reluctant to put away their plastic.

Credit and debit card sales at businesses open at least a year rose 6.3 percent during the second quarter, according to the First Hawaiian Bank Business Activity Report due to be released Wednesday.

"Seeing card spending grow over 6 percent demonstrates consumer confidence, which helps our business customers," First Hawaiian Chairman and CEO Bob Harrison said. "Because banks are a reflection of the economy, any expansion ultimately benefits our entire community, including First Hawaiian Bank."

The increase marked the 22nd consecutive quarter of overall growth dating back to when the bank began producing its reports at the start of 2010.

First Hawaiian, the largest bank in Hawaii with $18.7 billion in assets, can monitor broad economic activity in the state through its card processing services because the bank is the islands’ largest local processor of debit and credit card transactions. The bank has nearly 7,000 merchants in its network, with most of those in the state.

During the quarter, the bank processed $783.9 million in card transactions, with the largest volume being spent at restaurants ($145.7 million) with hotels a close second ($137.8 million).

"The fact that we’ve had 22 consecutive quarters of positive growth is a really strong indicator of continued growth in the economy," Harrison said. "We started not too long after the recession, and we’ve enjoyed this continued improvement since we started the report 5 1/2 years ago."

The second quarter was the first time since 2013 that the shipping sector, up 18.8 percent, had the largest percentage gain of the 16 categories tracked by the bank.

Young Brothers Ltd., the state’s largest interisland shipper, is seeing more credit and debit card transactions for higher amounts as part of an improving Hawaii economy.

Young Brothers, which delivers cargo between the state’s seven commercial ports, said it saw a 10 percent increase in the number of card transactions and a 16 percent increase in the value of those transactions in the second quarter.

Most of Young Brothers’ regular customers have lines of credit with the company and do not use credit cards, said Roy Cata­lani, Young Brothers’ vice president for strategic initiatives and external affairs.

Young Brothers, founded in 1900, has seven barges and seven towing tugs in its fleet which are used to ship food and beverages — the most common cargo shipped by the company — along with cars, construction materials and equipment.

"After flat growth rates for several quarters in neighbor island-bound cargo, the latter part of June was very encouraging (due primarily to strength in the auto rental industry)," Cata­lani said. "We do expect to do better in the summer months, and the holidays may bring more cargo increases."

Young Brothers’ intrastate cargo was up just under 1 percent in the second quarter of 2015 from the year-earlier period but down about 0.5 percent in the first six months of the year, Cata­lani said ahead of the company’s official report.

Besides shipping, there were double-digit percentage gains in card sales at utilities and communications (14.9 percent), supermarkets (13.8 percent), hotels (10.7 percent) and convenience stores (10.4 percent).

Four sectors in the report had declining card sales, including retail (down 0.3 percent), insurance (0.3 percent), medical services (5.8 percent) and travel agencies (5.8 percent).

"With retail we’re seeing the impact of online shopping," Harrison said. "It’s growing nationwide and would have an impact on many of our retailers."

First Hawaiian’s report does not include online purchases such as through Amazon.com, but does include online sales if the merchant has e-commerce and has its card processing set up through the bank.