By Frank Cho
Advertiser Staff Writer
Optimism about Hawai‘i’s economy is again on the downswing, even though almost one in two businesses in a recent local survey reported higher revenues compared to a year ago.
Forty-eight percent of 404 businesses polled by phone Jan. 12-19 reported higher gross revenues, up from 31 percent in the same period a year earlier, according to survey results released yesterday by the Business Banking Council.
But despite the improving financial figures, just one in three businesses polled said they felt Hawai‘i’s economy would improve in the next year — down 10 percentage points from the last time the survey was taken early last year.
"We don’t want to use the R word, but there is something dark looming out there," said Gary McCarty, president of Splash! Hawaii, referring to the possibility of a recession. Still, McCarty said, most retailers remain "cautiously optimistic" about the state’s economic outlook.
According to the council’s survey, the performance index — which measures changes in employment, gross revenues and profit before taxes — slid to 116, down three points from the last survey in the second quarter of 2000.
The survey, conducted semiannually for the council by Qmark Research & Polling, does not survey the same businesses each time and has a margin of error of plus or minus 5 percentage points.
"If history repeats itself, the second quarter should be better. If it goes down, that would be a reason for concern," said Barbara Ankersmit, Qmark’s president, referring to the performance index.
Ankersmit speculated that the drop in the optimism index could precede a drop in performance in the second quarter.
For the first time, the survey also gathered information on the effect of "big box" retailers such as Wal-Mart and Costco. Of the 95 retailers who participated in that part of the survey, 71 percent said big box retailers have had little or no effect on their businesses.
The survey also found:
 The number of businesses that said they had increased staffing in the last year fell to 23 percent, down from 27 percent in the second quarter of 2000. Large companies, those with 100 or more employees, did the most hiring. About 58 percent of companies surveyed said employment remained the same.
Forty-four percent of businesses polled reported pre-tax profits were up, compared with 37 percent in the same quarter a year ago. That is the highest level since the survey started in 1998.
Smaller companies were the least likely to report increases in gross revenues over the past year when compared with large firms.
Thirty-eight percent of retailers surveyed said the number of customers over the past year has increased. Another 33 percent said there had been no change, and 26 percent reported a decline in the number of customers.
Frank Cho can be reached by phone at 525-8088, or by e-mail, fcho@honoluluadvertiser.com
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