State says 2002 growth better than expected
By John Duchemin
Advertiser Staff Writer
With the U.S. economic outlook slightly better than expected, state forecasters have nudged up their 2002 predictions for growth in Hawai'i.
The Department of Business, Economic Development and Tourism expects personal income, a broad measure of people's economic gains, to grow 1.3 percent this year a more rosy forecast than the 0.7 percent growth predicted last fall.
DBEDT also raised its forecasts for visitor arrivals and reduced its forecast of job losses, thanks to the Mainland's surprisingly healthy recovery from a post-Sept. 11 slowdown.
"Hawai'i's economy appears to be holding up well under exceptional stress," said DBEDT director Seiji Naya. "Indications are that we are turning the corner, and as a result of more favorable conditions we have raised our forecasts."
Hawai'i economists have generally predicted economic recovery by midyear, but recent positive signs from the Mainland have injected a hint of optimism into many forecasters' expectations.
Bank of Hawaii economist Paul Brewbaker said the state's revisions take this into account.
"The data has proved a little stronger, specifically because of Mainland travel, and particularly to the Neighbor Islands," Brewbaker said.
Mainland visitor counts have converged with last year's levels on O'ahu and increased from 2001 on the Neighbor Islands. International visitor numbers, however, are still down 10 percent to 20 percent on most days.
DBEDT predicts a rebound of 3.5 percent in visitor arrivals, which plunged late last year as travelers stayed home or canceled trips in the wake of the terrorist attacks on New York and Washington, D.C. DBEDT's forecast is slightly higher than an earlier 3.0 percent forecast.
With thousands of workers still jobless many laid off in the weeks after the attacks DBEDT predicts a 0.1 percent drop in Hawai'i jobs this year. While down, that's an improvement from the earlier forecasted drop of 0.6 percent.
DBEDT also predicts a 1 percent increase in population, inflation of 1.3 percent and a 3.4 percent increase in visitor spending.