Hawai'i economic index up

Advertiser Staff

The official Hawai'i economic indicator has now risen for five straight months, a sign that the economy is set to improve this fall from last year's disastrous conditions.

Six of the 10 components of the Leading Economic Indicator rose in June, the latest month for which the statistics are available, said economists at the state Department of Business, Economic Development and Tourism.

The indicator is designed to predict economic fortunes five to 10 months in advance. It has proven most reliable when it rises or drops for several months in a row, economists say.

"The continued improvement ... indicates that Hawai'i is regaining the economic momentum it lost during the 2001 U.S. recession and worsened by the events of Sept. 11," said Seiji Naya, state director of business, economic development and tourism.

The strongest contributor to the improved forecast is an early-summer upturn in U.S. economic indicators, Naya said. Also helping is an increase in foreign currency values relative to the dollar, making Hawai'i vacations more affordable to international travelers.

Real estate indicators have also been strong for months as low interest rates and relatively low prices spurred a rebound in that market.

The strongest negative factor was Japanese wages, which suffer as Japan's economy keeps struggling. Japan's recession cut into Japanese arrivals here and contributed to the drop-off in tourism profitability, jobs and occupancy rates.