Hawaii economy There are clear signs that Hawaii's economy is on the mend, despite the fact that tourist travel from Japan is still weak, according to researchers at the University of Hawaii.
on the mend
The isles are bouncing back
Year by year
more rapidly than predicted
last year, a UH report contendsBy Russ Lynch
rlynch@starbulletin.com
"Given the recent signs of expansion on the U.S. mainland, we expect Hawaii to emerge from recession early this year and proceed to moderate growth as the year progresses," said a new report by Carl Bonham and Byron Gangnes of the UH Economic Research Organization.
Another isle economist, Leroy Laney of Hawaii Pacific University, said he and other local economists are in general agreement.
"I think that there is a consensus among the forecasters this year. I have not been far behind (Bonham and Gangnes) and neither has the state," Laney said. The economists agree that there will be a broad recovery in the second quarter, Laney said.
Bank of Hawaii chief economist Paul Brewbaker could not be reached for comment, but the February issue of the bank's publication Hawaii Economic Trends said the island economy after Sept. 11 is recovering faster than forecasts made late last year said it would. In November, a consensus of Hawaii economists said it would be midyear before Hawaii was back to its condition before the terrorist attacks. By late February, Bank of Hawaii had concluded recovery was coming sooner than that.
Most economists have said Hawaii's economy was already in a slide last year before Sept. 11, after record numbers in 2000.
Tourist traffic from the mainland is essentially back to where it was in 2000, the UH researchers said. "But Japanese passenger counts continue to fluctuate between 70 percent and 90 percent of last year's levels," the report said.
"Outside of tourism, the state has weathered the downturn fairly well," the Bonham-Gangnes report said. Job losses have been significant, with total non-agricultural jobs down 2 percent in the fourth quarter of 2001 compared to the last quarter of 2000, the report said, "but job recovery appears to have already begun."
"Hawaii will likely experience only a mild and short-lived recession in real personal income. Growth in the broad economy is probably already under way and will strengthen as the year proceeds," the UH research report said.
A number of sectors of the Hawaii economy -- such as construction, real estate and sales of automobiles and consumer durables -- have gained from a succession of Federal Reserve cuts in interest rates, Bonham and Gangnes said. The economy in the islands has been uneven, they said, with different performances in different segments in the economy as well as in different geographic areas.
"The neighbor islands have fared better than better than Oahu, in part because of their relatively smaller dependence on Japanese tourism, but also because of the strength in areas such as agriculture and budding high-tech that continue to perform very well," the report said.
HPU's Laney agreed and said while Waikiki, hardest-hit by the fall in tourism from Japan, was "ground zero," other sectors and areas have performed relatively well, particularly "anything that is interest rate-related."
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Hawaii economic indicators
A snapshot of the Hawaii economy from a new report by the University of Hawaii Economic Research Organization:* Projected figures
2000 2001 2002* 2003* Total visitor arrivals 3.5% -9.1% 3.0% 6.4% U.S. visitor arrivals 6.9% -4.1% 4.3% 3.5% Japan visitor arrivals 1.7% -18.8% 0.2% 12.0% Payroll jobs 3.1% 0.4% -0.3% 1.9% Unemployment rate 4.3% 4.6% 4.5% 4.3% Inflation rate, Honolulu 1.8% 1.2% 1.0% 2.1% Real personal income growth 2.3% 2.3% 0.5% 2.1%
UH Economic Research Organization
