Isles face slow
The forecast, though,By Russ Lynch
shows that all the key
indicators are positive
Higher personal income, lower unemployment, more tourists and an increase in the gross state product are expected to combine to improve Hawaii's economy next year, economist Leroy Laney said today.
But the growth will be slow, Laney stressed at the 30th annual First Hawaiian Bank Business Outlook Forum this morning at the Dole Cannery in Iwilei. "Our forecast for 2000 shows all the key indicators on the positive side," said Laney, economic consultant to the bank and a professor of economics and finance at Hawaii Pacific University.
For example, personal income has been growing at a rate of about 2.5 percent and the growth rate is expected to climb to 2.8 percent next year, said Laney, who described personal income as the broadest gauge of any state economy.
"This might pale beside the kind of growth Hawaii has had in earlier decades, but expectations have adapted enough by now for all of us to realize those days won't be back soon," he said.
Real gross state product has looked better in the late 1990s than it did earlier in the decade and is projected to rise 2 percent in 2000, Laney said. "This is a respectable number, even though it remains well below the current national growth rate of almost 5 percent. Hawaii has a way to go before its state economy compares well to its 49 mainland counterparts, but at least, and at last, things are looking up some."
The tourist industry's performance this year would look a lot better if a decline in arrivals from Japan wasn't countering some of the strong increase in traffic from the mainland, Laney said. (State figures issued yesterday show a 1.9 percent increase in total tourist arrivals for the first 10 months of 1999, a total of 5.75 million, with westbound arrivals up 6.5 percent and eastbound arrivals down 6 percent).
Laney predicts a full-year 1999 tourism growth of 1.5 percent and a 3.5 percent rise next year, which he said appears to be a dramatic upward shift.
Laney predicted a mild improvement in Hawaii's unemployment rate, which he estimates will average 5.4 percent in 2000 compared with 5.7 percent in 1999. The number of jobs in the islands is expected to end this year unchanged from 1998, with small job growth possible next year, he said.
Despite the positive signs, Laney recommended a cautious outlook toward the future. Hawaii's decline over the past decade was slow, he said. "There is still little reason to believe that the climb out of our slump will be anything but gradual also. Expectations of a return to spectacular post-statehood growth are especially unrealistic," Laney said.
He also said the recovery will be fragile and easily derailed.