Monday, June 4, 2001

Hawaii’s economy
dead last in 1990s

Alaska also suffered sluggish
growth during the decade

Star-Bulletin staff and news reports

Hawaii and Alaska suffered the worst economic growth rates in the 1990s of all states, while Arizona led the nation, according to a U.S. Commerce Department report issued today.

During the 1992-99 period, the national economy was growing at average annual rates of 4 percent. Arizona had an average growth rate of 7.3 percent and neighboring Nevada was not far behind with average growth of 7 percent.

But at the other end of the scale, Hawaii turned in the worst economic performance during this period, with its economy actually shrinking on average by 0.3 percent. Government analysts said that the state had trouble emerging from the last recession, in 1990-91, and then was hard hit by the 1997-98 Asian currency crisis, which cut into the state's tourism business.

Hawaii's own reporting suggests that the low- or negative-growth period is in the past.

State figures show 3 percent growth in Hawaii's real gross state product last year and there should be 2.8 percent growth this year and 2.8 percent growth in 2002, according to the Hawaii Department of Business, Economic Development and Tourism's latest quarterly report in April.

Hawaii economists could not be reached for comment early today but they had noted through most of the 1990s how the economy of the islands was standing still or moving backwards while other states prospered.

In addition to Arizona and Nevada, states that did significantly better than the 4 percent national average were Oregon, with an economy averaging growth of 6.8 percent, followed by Colorado, 6.6 percent; Idaho, 6.6 percent; New Hampshire, 6.3 percent; Utah, 6.3 percent; New Mexico, 6.2 percent; Georgia, 5.8 percent; Texas, 5.4 percent; and North Carolina, 5.1 percent.

Most of the states enjoying high growth rates were seeing big gains in the manufacture and sale of computers and related products such as software programs.

Alaska was next to last in the growth category with an average increase of just 0.5 percent during the eight-year period. Other states with weak performances were West Virginia, 2.4 percent average; Wyoming, 2.5 percent; North Dakota, 2.5 percent; Maine, 2.6 percent; Montana, 2.7 percent; Pennsylvania, 2.8 percent; New Jersey, 2.9 percent; Vermont, 3.0 percent; Maryland, 3.0 percent; and Rhode Island, 3.0 percent.

In the 12 states with the weakest growth rates, gains in high-tech industries were offset by significant weakness in old-line manufacturing industries such as apparel and textiles and lumber and wood products.

California, with the biggest economy, averaged growth of 3.9 percent during the eight-year period, just under the national average but far below many of its fast-growing Western neighbors. Its economy was slow to emerge from the 1990-91 recession, reflecting in part big cutbacks in federal spending on defense, which hit California particularly hard.

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