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The Honolulu Advertiser

Posted on: Friday, July 25, 2003

Hawai'i personal incomes rise 5.5 percent

By Deborah Adamson
Advertiser Staff Writer

Personal incomes in Hawai'i rose by 5.5 percent in the first quarter compared with the same period a year ago, the third fastest increase nationwide, boosted by strength in construction, defense spending and professional services.

The U.S. Bureau of Economic Analysis said this week that only South and North Dakota beat Hawai'i, with personal income growth rates of 7.4 and 6.5 percent, respectively.

"There's a lot of people making more money than ever," said Paul Brewbaker, chief economist at Bank of Hawaii. Personal income growth in Hawai'i has been outpacing the national average for the past two years, Brewbaker said.

Personal income includes income from wages, rentals, dividends, sole proprietorships and government benefits such as welfare.

When compared with the previous quarter, Hawai'i personal income increased by 2 percent in the first quarter, the fourth largest increase in the country. California sported a 0.8 percent gain, landing in the 40th spot, while New York increased 0.6 percent, coming in at 47th nationally.

Earnings of government workers as a whole grew fastest, at a 5.2 percent clip compared with the previous quarter. Construction came in second, at 4 percent, and education and health services increased by 3 percent.

During the past two years, average incomes in professional and administrative services grew by 16 percent per year, compounded. Military incomes increased by 11 percent, and construction by 8.8 percent.

"The picture is quite optimistic," said Leroy Laney, professor of economics and finance at Hawai'i Pacific University. "The personal income numbers ... have been coming in quite strong."

Hawai'i is recovering from an economic slump in the 1990s that has resulted in pent-up demand for housing, Laney said. Low interest rates are also fueling the current real-estate boom.

The Mainland also showed improvement. Nationally, personal income grew by 3.4 percent in the first quarter from a year ago and 0.9 percent from the previous quarter. Thirty-nine states showed growth, compared with only 10 in the first quarter of 2002.

A study by the Milken Institute, a nonprofit think tank, shows that Honolulu is pulling out of its economic slump. The county ranked 18th out of 200 metropolitan areas nationwide in job growth last year. That's an improvement over the county's five-year record, which was 181th.

Gary Wassel, president of Jardine Hawai'i Motor Holdings, said his luxury car company has sold 25 percent more autos in the first half of 2003 compared with last year. His inventory of car brands includes Mercedes Benz, Jaguar, Land Rover, Porsche and Honda.

He added that this year appears headed toward breaking last year's record sales.

"We're having a magnificent year," Wassel said.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.