Business confidence
rivals pre-9/11
Hawaii business owners are as optimistic about the state's economy as they have been in the past 16 years.
A Bank of Hawaii business confidence survey released yesterday said results of an August study are the highest they've been since the late 1980s. In addition, local business owners' expectations about Hawaii's overall economy exceeded forecasts for their own sales performance for just the second time in the history of the survey.
"Confidence in Hawaii's economy among local business owners rivals year-2000 levels, before the U.S. mainland recession and events like 9/11 and SARS," Bank of Hawaii chief economist Paul Brewbaker said.
Brewbaker said local companies' higher expectations for the economy over their own sales prospects suggest that firms are operating with cautiously optimistic expectations amid global uncertainty. The responses from the 372 survey participants revealed that 60.6 percent expected somewhat or much higher performance for the Hawaii economy during the next 12 months, while 53.8 percent held the same view for their own company's sales. Only 9 percent expected a lower performance for the economy while 11.6 percent expected lower sales.
Until February of this year, confidence about Hawaii's economic prospects always had been slightly lower than confidence about prospects for companies' own industries or sales.
"Hawaii firms are reducing their debt like their mainland counterparts but, in contrast to the mainland, local firms are hiring and investing to expand their productive capacity," Brewbaker said.
Respondents expecting higher profitability in their businesses reached 49.8 percent to mark the highest rating in that category since it was included in the survey in 1992. Only 15.8 percent expected lower profits.
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More details
To get the bank's complete survey results, visit www.boh.com/econ/.
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"What I'm hearing is that business is good across the board," said Pregill, whose organization represents local, national and international companies doing business in Hawaii. "I think a lot of that has to do with more money in the economy. The tourism numbers are up, visitors are spending and when you look at what the construction industry is doing and the number of homes that have been sold and number of homes refinanced, people have money to spend in their homes."
Pregill cited home furnishings, home improvement and new cars as some of the areas that have been booming. She also noted expansion and renovation projects at Ala Moana Center, Victoria Ward and in Waikiki.
"Someone asked me once if I thought we had recovered from 9/11 and all these events," she said. "I'm not convinced recovery is the right word. I think our economy has evolved into something a little bit different. We're all a little bit different from where we were three years ago, four years ago."
Among other survey results, capital spending was seen increasing over the next 12 months by 37.7 percent of business owners while only 13.7 percent expected lower capital outlays. Inventories were expected to increase in the next year by 25.5 percent of respondents while 13 percent expected lower inventory levels. And additional hiring was seen by 28.4 percent of local businesses while only 9.6 percent expected lower levels.
Survey results also indicated that the majority of respondents expected a higher performance for their own industries during the next 12 months.
The survey, which is conducted twice a year, has a margin of error of plus or minus 5.1 percent. It was first held at the end of 1988.
