Fed move is 'good news' for Isle rates
By Lynda Arakawa
Advertiser Capitol Bureau
In keeping with recent positive reports, economists told members of the state House Finance Committee and Senate Ways and Means Committee yesterday that they are optimistic about continued growth in Hawaiis economy this year.
"I think it was a good confirmation for us that the economy is getting better," said Senate Ways and Means Committee Chairman Brian Taniguchi, D-11th (McCully, Moiliili, Manoa). "I think the economists seem to say that Hawaiis economy seems to be strong enough that it can continue to grow even with a slight recession on the Mainland."
Bank of Hawaii chief economist Paul Brewbaker told lawmakers that neither construction nor tourism will decline this year, and that the growth in construction which he predicts to be in double digits will outpace that of tourism.
"The dominant factor in continued solid economic growth for Hawaii in 2001 is the sheer momentum of construction activity that will carry through the year," said Brewbaker.
Brewbaker said the unemployment rate will remain at or below the national average, in the range of 3.5 to 4 percent.
Although the forecast is positive, there is the possibility of slower growth later this year, said Hawaiis chief economist, Pearl Imada Iboshi. She said, however, that does not mean the state is on the verge of a recession.
Iboshi said she expects the number of jobs in Hawaii to grow by 2 percent for the year and by about 1.8 percent over the next few years. She also said visitor arrivals should have grown by 4.2 percent in 2000 and should grow by another 3.7 percent this year.
State Budget Director Neal Miyahira cautioned that while officials expect revenues to increase, the state needs to maintain a "prudent spending policy."
Miyahira said the state cannot afford to grant all the public employee unions pay raises without cutting spending or raising taxes.
Taniguchi said he doesnt believe theres a movement to raise taxes. He also said that "were running some numbers right now" to see if union pay raises and other state obligations can be financed.
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