State's leading indicator declines

By Frank Cho
Advertiser Staff Writer

Hawai'i's leading economic indicators fell in December, marking the index's 18th decline in 19 months and signaling slower growth for the state's economy.

Seven of the 10 indicators that make up the index's composite were negative in December, according to figures released yesterday by the state.

"Overall, the components of the LEI are signaling slower growth, but we should note that two of the three national components were positive in December," said Seiji Naya, director of the state Department of Business, Economic Development and Tourism.

The Hawai'i leading economic indicator, or LEI, is compiled by DBEDT's Research and Economic Analysis Division and signals economic activity five to 10 months in the future. A rise in the index signals faster growth ahead, a decline signals slower growth.

All five indicators based on data from the Hawai'i economy fell during December, including initial unemployment claims, O'ahu real estate sales, average hours worked and construction permit values. Only one of three national indicators and one of two international indicators fell during the same period.

Naya said the uptick in the national indexes is consistent with other national indicators that are showing signs of recovery.

"A better-than-expected recovery in visitor arrivals in recent months, in conjunction with these signs of improvement in the U.S. economy are expected to fuel a faster recovery of our local Hawai'i economy," Naya said.

However, Naya said it's still too early to say that Hawai'i is on an economic upswing. Naya said economic weakness in Japan could still negatively affect Hawai'i.

Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.