Further economic slowing predicted
| • | State wary of tourism slide |
Advertiser Staff and News Services
For yet another month, a predictor of Hawai'i's future economic activity continued its downward slide, pulled by the Mainland slowdown.
The Leading Economic Indicator, prepared by the state Department of Business, Economic Development & Tourism, showed mixed signals for February, the last month for which figures are available.
But the overall signal from the diagnostic measure suggested that the state's economy will experience more slowing toward the end of this year.
It is the latest in a string of consecutive monthly declines in the indicator, which signals economic activity for the Islands five to 10 months in advance.
"For the most part, the influence of the Mainland's economy and continued uncertainty about Japan's economic health have driven the LEI downward," said Seiji Naya, director of the Department of Business, Economic Development and Tourism, which released the report yesterday.
The last LEI increase was July 2000, a state economist said.
The February report parallels other predictions from public- and private-sector economists and business leaders who say the state is likely to feel more effects from the national slowdown in months to come.
Three of the five Hawai'i indicators rose in February including initial unemployment claims, construction permit values and average work hours.
Growth in O'ahu real estate transactions slowed, and O'ahu real estate prices declined.
Two of the three national LEI components fell, the report said.
Both the national leading index, a common measure of U.S. economic performance, and the Pacific region consumer confidence indices declined. However, the interest rate environment began to improve in February.
Both of the international LEI components also dropped in February. The yen depreciated, reducing the purchasing power of Japanese visitors, and the growth in Japanese labor earnings moderated.
"On the positive side," Naya said, "three of the four rising components came from the Hawai'i measures."
