Big Island economy HILO >> Hawaii's economy has come out of a terrorism-induced recession and is building toward better economic levels in 2003, according to First Hawaiian Bank consultant Leroy Laney.
looks to pick up
It's like a family car, economists
say, dependable but without pizzazzBy Rod Thompson
rthompson@starbulletin.comUniversity of Hawaii at Hilo economics professor David Hammes described the Big island's economy as a trusty family car. It might not have pizzazz, but it's dependable.
Both economists helped present First Hawaiian's annual economic outlook, speaking yesterday morning to the Hawaii Island Chamber of Commerce and yesterday afternoon to the Kona-Kohala Chamber of Commerce.
Optimistic signs for the future include a projected tripling in the number of cruise ship passengers and $140 million in planned building at the University of Hawaii at Hilo, Hammes said.
The state economy would have shown better growth than the mainland if not for the Sept. 11 attacks, Laney said. But the recession that resulted in Hawaii was milder and shorter than expected, he said.
The recession was confined mostly to tourism, while sectors such as construction and real estate were boosted by low interest rates, he said.
Statewide visitor arrivals fell 9.1 percent in 2001, but will regain part of that, about 3 percent, this year, Laney said.
A bright spot is cruise ship passengers visiting the Big Island. They averaged around 75,000 per year during the 1990s, then grew uninterrupted by the Sept. 11 attacks to around 225,000 this year, Hammes said.
Hammes distinguished between East and West Hawaii economies.
Public and private construction permits, a leading economic indicator, were falling on the Kona side even before Sept. 11 from a monthly value of $50 million to $20 million. They now average $24 million per month, he said.
On the Hilo side, except for a $40 million blip in October, permits averaged $11 million per month in the same period, but roughly doubled that level in May and June.
UH-Hilo continues to be a major contributor to the economy, with plans for a $30 million astronomy education center, a $50 million multipurpose and performance center, and a $60 million China-U.S. Center.
UH-Hilo has the third highest proportion of foreign students of any university in the nation, 500 out of 3,000, Hammes said. These students alone contribute $13.5 million per year to the Big Island economy.
"Hawaii is in a recovery mode now," but not strongly enough that any job growth is likely this year, Laney said.
That's no immediate comfort to East Hawaii, which posted a 7.9 percent unemployment rate in June. In West Hawaii, 5.9 percent of the work force was jobless, on par with the national average.