State economy may grow 2.7%

Advertiser Staff

Hawai'i's economy is expected to grow 2.7 percent this year, moderating to 2.4 percent next year, according to the most recent forecasts by the state Department of Business, Economic Development and Tourism.

"Hawai'i's economy has actually performed well in the face of weakness on the Mainland and in Japan," Seiji Naya, director of the business development agency, said yesterday. "Though we expect growth to slow somewhat, there seems to be a solid base of economic activity."

The Hawai'i forecast reflects lower expected growth in the U.S. economy of 1.8 percent this year, compared to 5 percent in 2000. Japan's growth is expected to be 1 percent to 1.5 percent for the next two years.

In its most recent quarterly statistical and economic report, the agency said wage and salary jobs in Hawai'i grew by 2.7 percent in the first quarter, and by 2.3 percent through May. The agency said it forecast job growth of 2.4 percent this year, and 2.1 percent next year.

Hawai'i's nominal personal income grew by 4.8 percent last year, and the department said it forecasts growth of 4.5 percent this year. After adjusting for inflation, that translates into real growth of 2.5 percent for 2001.

The state's jobless rate averaged 4.1 percent in the first quarter this year, down from 4.5 percent in the same quarter last year. Through May, the jobless rate averaged 4.3 percent, down from 4.5 percent for the first five months of last year.

The growth forecast in the gross state product is holding at 1.8 percent for this year, up from 1.6 percent last year.

Copies of the report are on the agency's Web site at www.hawaii.gov/dbedt/qser.html.