Posted on: Friday, September 7, 2001

Editorial
Economic news good, but we're not there yet

Positive economic winds were blowing across the state this past week, but it is far too early to conclude that Hawai'i is once again in for a long run of fair financial weather.

In fact, it would be a mistake for policy-makers on either the public or private side to make much at all out of the current good news. The job of building a solid, sustainable and growing Island economy remains largely ahead of us still.

The first piece of news is that the state's Council on Revenues is sticking with earlier estimates that state tax collections will grow by 4 percent this year. That would reflect a modest but relatively healthy economic growth for the state as a whole.

That projection largely reflects the downwind economic effects of events that have already happened, including the robust Mainland economy of last year and a steadying of visitor arrivals from Japan.

Looking ahead, however, one sees a slightly different picture. The Mainland economy and the stock market, as we all know, are wobbly at best. Japan's economic picture is close to dismal and — barring rather dramatic economic and banking reforms — not likely to get better any time soon.

The second news was the robust O'ahu real estate market, which hit an 11-year high for activity in August. That's good news for real estate agents, of course, and happy news for those who are getting a new home or apartment.

But it hardly adds up to any kind of signal that the Hawai'i economy is hot. Sales are up because lending rates are low and prices are down. Those are conditions that emerge in a cool economy, not one that is roaring ahead.

The truth, however, is that we should not wish for, nor expect, a roaring economy. The days when Hawai'i experienced double-digit economic growth are almost certainly over forever.

And in the long term, that is a good thing. What we should aim for is modest, steady and sustainable growth. There is nothing in the economic news of the moment to suggest we have reached that goal.