By Glenn Scott
Advertiser Staff Writer
After a year of encouraging growth, Hawai‘i’s economy should continue to grow in 2001 at nearly the same pace, the state’s economic research office said yesterday.
Fueled by increases in tourism, jobs and personal income, the state economy broke out of its doldrums last year and grew by 2.8 percent, researchers for the state Department of Business, Economic Development & Tourism estimated in their latest Quarterly Statistical and Economic Report.
This year, according to the report, the trend should sustain itself and the economy should expand at 2.7 percent.
The forecast comes at a time when U.S. stock markets are declining, Japan’s economy still lacks momentum and the Mainland economy is slowing.
Despite that, economists here say Hawai‘i is likely to continue its expansion after a year of record-high visitor arrivals and low unemployment rates. That rate reached a low of 3.7 percent in November 2000.
The state report estimates visitor arrivals will grow this year at 3.7 percent and they will spend 8.7 percent more money. It also expects that businesses will add new jobs at an annual rate of 1.8 percent.
"Hawai‘i’s economy performed well last year," said Seiji Naya, director of the state department. "While we carefully monitor the economic signals from the Mainland and Japan, we expect Hawai‘i’s economy to continue its recent expansion."
The report, in fact, forecasts that expansion will last at least until 2003, though at rates that decline slightly.
For instance, after adjustments for inflation, personal income grew at 2.8 percent in 2000, according to the department’s preliminary finding. The report calls for the rate to remain the same this year, then ease off to 2.6 percent in 2002 and 2.4 percent in 2003.
This year’s forecast fits with what Tim Alex, marketing director at Altres Staffing, calls similar "soft indicators" at his employer services company. The most noteworthy indicator he sees is a growing demand for workers. That lack of supply, he said, was an issue businesses tended to overlook during tougher economic times.
"Our experience is that the jobs are out there," he said. "Now the challenge is to find the people to fill them."
Regi Tinay, chief financial officer at C&J Telecommunications, said companies had to diversify and improve efficiencies to stay afloat during the state’s flat economic performances of the past decade. Now, he said, those leaner companies are insisting on retaining their productivity gains and are looking for other ways to grow.
"Now the bottom line is even better," he said.
Altres and C&J are local companies in the fast-growing sector that markets office services to other businesses. Altres provides temporary employment, job recruiting and administrative services; C&J offers services from 24-hour telephone answering to completion of medical and insurance forms.
"Most economic reports seem to be overly optimistic," said Alex, "but we definitely are seeing a turnaround."
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