Wednesday, August 22, 2001

Big Island bucks
slow economy

Growth expected to survive
weakness in U.S., Japan markets

By Rick Daysog

The slumping U.S economy and the continued weakness in Japan is putting a dent on the Big Island economy. But not enough to offset an otherwise positive year.

That's the outlook of Marcia Sakai, director of the University of Hawaii at Hilo's School of Business.

Speaking at First Hawaiian Bank's Hawaii County business outlook forum at the Naniloa Hotel today, Sakai said Hawaii County will continue to see an increase in jobs, incomes and tax collections, although the growth will be at lower rates than in previous years.

Sakai noted tourism flight arrivals and hotel occupancies are off this year from the highs recorded in 2000. But some of that will be offset by the growing cruise ship business to the Big Island.

Sakai predicted arrivals from cruise ships will likely hit 170,000 this year, a 95 percent increase from the previous year.

The overall Big Island economy also is receiving a boost from the high-tech and health care sectors, Sakai said. Between 1996 and 1999, the county has enjoyed 18 percent growth in technology related jobs.

Since 1990, the county has seen a 90 percent surge in the number of health-related jobs. The health care industry now employs more workers than the Big Island's construction sector, she said.

The county's agricultural industry, meanwhile, is remaining steady at the $155 million level, she said. While revenues from traditional crops such as coffee and macadamia are down, other sectors such nursery and foliage crops, papaya, banana and aquaculture are on the upswing.

In many ways, the Big Island economy will mirror the performance of the overall state economy.

Leroy Laney, economics professor at Hawaii Pacific University and a consultant to First Hawaiian Bank, forecasted that the state's gross state product -- the widest measure of isle economic activity -- will grow a modest 2.5 percent this year.

The state will also see a 2.5 percent rise in personal incomes this year, while the overall job count will increase about 2 percent, he said. But visitor arrivals will be flat from last year's record numbers, according to Laney.

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