That consensus was delivered by two economists yesterday at a business outlook forum sponsored by First Hawaiian Bank. Job and income growth are at levels reminiscent of the state's 1980s boom.

The state's jobless rate is lower than the national average; bankruptcy filings are the lowest since 1997; and this year will likely be the best year for new auto sales since 1989, said Leroy Laney, an economics professor at Hawaii Pacific University and First Hawaiian Bank Consultant.

Barring an unanticipated event such as war or terrorism, "there is no reason to expect that Hawai'i's good health shouldn't continue into 2004," he said. "Some marginal slowdown might occur just because 2003 turns out to be a very good year and growth rates are hard to top."

The major hitch going forward is the prospect of a rise in long-term interest rates, which could dampen construction spending, Laney said.

"As time goes on, this could take some of the steam out of the local real estate market and refinancings will be less likely to give new boosts to consumer purchasing power," he said.

However, $2 billion in pending projects to privatize and renovate military housing in the islands should provide the cyclical construction industry stability regardless of interest rate activity or an unforeseen geopolitical event, Laney added.

"That may not kick in immediately, but it could begin to impact the local economy as early as sometime next year," he said. "When it does, it should underpin construction activity for some time to come."

KENNETH COURTIS

LEROY LANEY

Courtis said his outlook for Japan remained cautious with the country's estimated growth in gross domestic product dipping from 2.5 percent this year to 1.8 percent next year. Continued economic sluggishness in Japan doesn't bode well for tourism from that market. However, Courtis predicts that Japan's significance to Hawai'i could be surpassed by China as that country's economy continues to modernize and grow.

"You've got this enormous engine now that is getting into gear," he said, while forecasting China's gross national product dipping slightly to 8.6 percent growth next year compared with 9 percent growth this year.

The chief stumbling block to tapping into China tourism remains restrictions on visas for Chinese travellers. Travel from China and Korea already has suffered because of stricter entry requirements imposed after the Sept. 11 attacks. Those requirements include face-to-face interviews at American embassies to obtain travel documents.

"If that's resolved I think you're going to see over a long period of time a substantial increase in the number of people travelling," Courtis said.