State raises economic
predictions for 2004Hawaii's economy is expected
to grow by 2.8 percent next year
The state Department of Economic Development & Tourism is more optimistic than three months ago about Hawaii's economic prospects for 2004, according to its latest forecast released yesterday.
The state expects the local economy to grow by 2.8 percent in 2004, a full percentage point higher than its September forecast.
University of Hawaii economist Byron Gangnes said DBEDT's latest forecast is on track with what he expected for the state.
"It sounds very consistent with what we see for the current year," he said.
The forecast for new jobs and growth in real personal income in 2004 also increased in the latest report.
Total wage and salary jobs are now expected to show a 2 percent increase in 2004, up from a September forecast of 1.3 percent.
Real personal income, which is income adjusted for inflation, is forecast to increase by 3.4 percent in 2004, up from September's forecast of 2.1 percent.
One of the brightest spots in the economy has been the continuing strength of the construction industry as reflected in the number of building permits issued, said Pearl Imada Iboshi, the state's chief economist. Total private permits for future construction in Honolulu, Kauai and Hawaii counties were up 5.8 percent in the third quarter.
"One of the most promising things is building authorizations are way up, so that's a very good indicator," she said.
Maui County data was not available in the DBEDT report.
On the other hand, the contracting tax base, which measures current construction, dipped 2.8 percent in the third quarter.
Iboshi and Gangnes said they were not concerned about the dip.
"Tax base numbers are very volatile, so it's hard to tell too much," Gangnes said.
"Overall it's been up, even if down for the quarter," Iboshi said. "A lot of it is very cyclical."
DBEDT said it expects visitor arrivals to grow by 6 percent in 2004. That number has been revised down slightly from September's forecast, when DBEDT predicted a 6.3 growth in arrivals over last year. But it is a big improvement over the past couple of years, Iboshi said.
For 2003, DBEDT predicts an overall 0.6 percent decrease in arrivals. The count of visitor days in the islands this year is expected to increase by an estimated 3.8 percent, with total visitor spending expected to rise 4.8 percent.
"Overall, I think we have a pretty solid economic picture moving forward," Iboshi said.
"I guess you could say happy days are here again," she said.
The report estimates that 2003 will show a 2.9 percent growth in the economy for the year along with a 2.2 percent increase in wage and salary jobs. Bankruptcy filings in the third quarter of 2003 were down 19.2 percent from a year ago.