State of Hawaii

State report
says economy
maintaining momentum

The long-delayed data comes
a day before the primary election

By Bruce Dunford
Associated Press

A state report, released on the eve of a primary election in which Hawaii's economy has been a key issue, says that for the fifth month in a row, economic indicators signal improved economic conditions in the months ahead.

The Department of Business, Economic Development & Tourism's supposedly monthly report on Hawaii's Index of Leading Economic Indicators was released yesterday for the first time since May.

Department spokesman Mark Want said the release was based on when researchers could obtain all the data needed to compute all the indicators used in the report and the missed reports.

Its release the day before the primary election was a coincidence, he said.

"It was just the mechanics of collecting all the information together that caused the delay" as well as the inability of the department to produce a report for the past three months, Want said.

The report said six of the 10 indicators making up Hawaii LEI rose in the latest compilation, based on data through June 2002.

The index is designed to anticipate accelerations and slowdowns in Hawaii's economy five to 10 months into the future.

"The continued improvement in the LEI indicates that Hawaii is regaining the economic momentum it lost during the 2001 U.S. recession and worsened by the events of Sept. 11, 2001," said department Director Seiji Naya. "However, the key to keeping our economy on this growth path continues to be a sustained recovery in the larger U.S. economy."

A gradual improvement in the index of U.S. economic indicators into the early summer was the strongest contributor to Hawaii's index for the latest period, the report said.

It points to an increase in the national leading index and an increase in the Pacific region consumer confidence, offset by a modest deterioration in the interest rate environment.

While the national index has been giving mixed signals in recent months, its average performance over the past half-year has been positive, the report said.

The second most significant contributor to Hawaii's overall index was an increase in the value of foreign currencies relative to the U.S. dollar, particularly the Japanese yen, it said.

Stronger foreign currencies tend to make Hawaii vacations and products a better bargain in international markets, as well as making foreign investment in the state more attractive, the department noted.

In Hawaii the report points to a climb in Oahu real estate transactions and an increase in Oahu residential real estate prices. In the negative area were a decline in average work-hours and a slight dip in the total value of construction permits.

The largest negative contributor in the June LEI was a decline in Japanese labor earnings, the department said.

State of Hawaii

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