Index rise is sign of economic growth

By John Duchemin
Advertiser Staff Writer

The state government is predicting gradual economic growth into 2003 as Hawai'i's official economic index rose for the seventh straight month.

Buoyed by the booming housing market, drops in unemployment claims and improved national and international indicators, the state's Leading Economic Indicator rose in August, as it has every month since February, the state Department of Business, Economic Development and Tourism announced yesterday.

The streak is a sign that the economy has entered a period of sustained recovery after the brief slowdown and months of uncertainty following the Sept. 11 terrorist attacks.

"As long as the index remains positive, gradual improvement is likely in the months ahead," said Pearl Imada Iboshi, the chief economic researcher for DBEDT. "However, much depends on the course of economic growth in both the U.S. and Japanese econo-mies."

The indicator, a composite of 10 local, national and international economic gauges, is designed to predict conditions in Hawai'i five to 10 months in advance. Eight of the 10 components in August showed improvements.

Leading the rise were increasing growth rates in several measures of the real estate sector: O'ahu real estate transactions, construction building permit value, and O'ahu residential real estate prices.

Also improving were state jobless claims, the national leading index, the Pacific states' regional consumer confidence index, Japanese labor earnings and the trade-weighted yen-to-dollar exchange rate.

The only indicators to decline were average work hours in Hawai'i and the national interest rate spread.