Isle economists:
No recovery soon
The current downturn is
By Richard Borreca
'more than a normal business cycle'
Star-BulletinHawaii's economy isn't expected to get much better any time soon, according to some of the state's leading economists. They made their predictions yesterday at the Japanese Cultural Center during the Hawaii Economic Association's annual economic outlook meeting.
One of the key ways economists measure the state economy is by studying the growth of personal income. That figure is the most troublesome for Hawaii.
"The growth rate is now lower than at any point since statehood," said Leroy Laney, senior vice president and economist for First Hawaiian Bank.
"As the weak economy continues, it has become clear this is more than a normal business cycle," Laney said.
To make matters worse, Laney predicts that 1997 will not be as good a year as 1996, which saw little economic growth.
Bank of Hawaii's chief economist, Paul Brewbaker, was as pessimistic, pointing out that the state's plans to more than double construction spending will only make up for the private construction missing from the economy.
The state Legislature agreed to increase state construction from $400 million to $1 billion in the next two years. But the private construction industry which used to turn over $1.5 billion a year, has only been able to develop $1.1 billion in 1996, Brewbaker said.
"So what we are saying even with the governor's program, construction will remain the same," he said.
University of Hawaii economists, Carl Bonham and Byron Gangnes, predicted only slight growth. They predicted visitor arrivals to be lower than last year, but slight increases in personal income and an equally small increase in new jobs.
The pair, however, warned that economic predictions in Hawaii have been overly optimistic, despite the best efforts to apply scientific models to the economy.
"Forecasting Hawaii's economy has been a particularly nasty and unrewarding enterprise in Hawaii for the last five years," Gangnes said.
The other economists agreed, saying that their own reports have failed to pick up the real weaknesses in the state's economy.
The strongest words of support for the local economy came from Pearl Imada Iboshi, with the state's Business, Economic Development and Tourism Department.
She expects personal income to grow slightly this year and even more next year. The state would be helped, she said, by a strong economy across the mainland and an expected strengthening in the value of the Japanese yen.
