Business optimism
at all-time high
A new survey shows half
of isle firms are doing better
now than last year
Half of Hawaii businesses are reporting higher revenues than last year, according to a business survey released yesterday.
The survey by the Business Banking Council showed that optimism is at an all-time high, particularly in the state's visitor industry.
As many as 49 percent of Hawaii companies believe the state's economy will improve this year while 10 percent think things will get worse. The remainder, 37 percent, believe the economy will be about the same.
"The experience seems to bear out that Hawaii's businesses have had a good year, they've recovered from 9/11 and they're looking toward the future," said Barbara Ankersmit of QMark Research & Polling, the Honolulu firm that conducted the survey.
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The group that thinks the economy will worsen is small compared with the 40 percent who felt that way in the first survey six years ago, Ankersmit said.
The research was done through telephone interviews with representatives of 410 companies, who were contacted from July 8-20.
However, the study also showed that fewer than half of the visitor industry firms, 42 percent, say they've fully recovered from the negative effects of 9/11. Forty percent said they have experienced at least a partial recovery.
Overall, 55 percent of these companies expect visitor spending to increase in the next year or two.
Looking at the actual performance of the businesses surveyed, the study showed several positive changes.
"Things are looking rosy," Ankersmit said. "We're a happy bunch, I'd guess."
The latest survey shows 50 percent of the respondents reporting higher gross revenues than a year ago. That was a slight increase from 49 percent in a similar survey in the second quarter of 2003. Declining revenues were reported by 21 percent this year, an improvement from 30 percent a year earlier.
There was also a slight increase in the number of people saying their pre-tax profits were up, 39 percent vs. 45 percent, a year ago. Fewer saw profits getting smaller -- 24 percent compared with 31 percent a year earlier.
Most companies reported they are hiring or maintaining staff. However, many of those surveyed said they felt the pool of qualified job applicants is shrinking, with one in 10 companies saying the tight labor market has resulted in positions going unfilled.
"Maybe one of the reasons people aren't forecasting more hires is the difficulty in finding good hires," said Ted Liu, director of the state Department of Business, Economic Development & Tourism. "We don't have a shortage in absolute terms; it's really a shortage in skill sets."
Meanwhile, the survey found the visitor industry particularly optimistic. While performance indicators for the industry were slightly lower than for all Hawaii companies, the optimism index for this sector was 140, six points higher than the overall group.
"The optimism reflects what is in the marketplace now," said Marsha Wienert, Gov. Linda Lingle's tourism liaison. "Everything is positive from the economy to the pent-up demand to Hawaii being top of mind in many markets."
Domestic arrivals by air rose 7.2 percent, to 504,692 visitors, the highest July result on record, she said.
International visitor arrivals surged 22.1 percent, thanks to double-digit growth in the number of Japanese and Canadian visitors.
Visitors spent $1 billion in July alone while total visitor expenditures increased 7.9 percent to $6 billion for the first seven months of 2004, Wienert said.
"There's no question that tourism, which comprises about one quarter of the overall state economy, drives many segments of the economy," Wienert said. "There are many positive signs in the overall economy now that things are moving forward in the visitor industry."
But state officials and members of the visitor industry cautioned Hawaii's companies not to get too complacent in these days of optimism.
"The time to deal with issues, such as visitor satisfaction and improving the product, is when times are good," said John Monahan, chief executive of the Hawaii Visitors & Convention Bureau.
Hawaii needs increased airlift, more activities, better lodging and improved infrastructure for visitors, he said.
