The Hawaii economy is on the way to recovery 15 months after the Sept. 11 disaster knocked world tourism for a loop, but there is still some distance to go. Isle economy recovering,
but not back from Sept. 11Looking only at the state
unemployment rate misses
the bigger picture, a new
UH report saysBy Russ Lynch
rlynch@starbulletin.com
At least one figure, the unemployment level, is misleadingly positive, according to a new study by the University of Hawaii.
"The state unemployment rate has receded back to a deceivingly healthy-looking 4 percent," said research economists Carl Bonham and Byron Gangnes. "But this is entirely due to a decline in the labor force. No net gains in employment have yet been seen in Hawaii," they said in the December report by the University of Hawaii Economic Research Organization.
State labor figures bear out that contention. In October, when the 4 percent state unemployment level was recorded, the statewide work force was 591,300. In October 2001, when the unemployment rate was 5.3 percent the work force was 607,750, according to the state Department of Labor & Industrial Relations.
In October 2001 there were 575,500 Hawaii residents in jobs, while a year later there were 567,800, a 1.3 percent decline, the state figures show.
Bonham said yesterday that in 2000 jobs grew and the work force grew, but work opportunities outpaced the growth in the number of people looking for work. That hasn't been true lately, Bonham said.
Looking at the bigger picture, the UH economists said strong recovery in tourism from the mainland helped counter the continuing shortfall in travel from Japan. But "the Japanese side continues to fall short of pre-recession levels," the UHERO report said.
"Few of the tourism jobs lost after 9/11 have returned," the report said.
On the positive side, a booming real estate market and some growth in other service areas have helped the islands get through a two-year economic downturn, the report said. That has meant real growth in Hawaii income despite the poor tourism performance, the economists said.
"With mortgage rates at 30-year lows, the refinancing pipeline at local banks has been full, which boosts profits for banks and mortgage brokers, but also puts extra money into the pockets of local consumers," the report said.
"Hawaii's housing market has been more robust than in any recent year, with resale volume continuing to grow strongly and home prices moving up sharply in many areas," according to the report.
In another bright spot, building permits statewide were up 4 percent for the first nine months of the year.
Looking ahead, the university team expects economic improvement next year.
"Despite continuing weakness in tourism and the overall job market, Hawaii's economy has made progress in recovering from last year's slowdown," the researchers said.
"We expect that recovery to continue in 2003, supported by income growth in the local construction industry, services and government."
But the report said recovery in Hawaii will be limited by continuing relative weakness in Hawaii's outside markets, such as Japan.
The full report was to be posted last night at www.uhero.hawaii.edu.
UHERO Hawaii Outlook report
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