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The Honolulu Advertiser
Posted on: Sunday, February 28, 2010

Hopeful but elusive signs of recovery

There are no blizzards, ice storms or deep freezes to deal with in Hawai'i, but our winter has still been a cold one. Closed schools, half-empty hotels and a gnawing sense of helplessness and disenfranchisement can be as chilling to the soul as a foot of snow can be to the bone.

But as we head toward spring, there are some encouraging economic signs that suggest a thaw.

March brings the start of new and expanded air service from California, which will provide an especially big boost to Maui and the Big Island. Total statewide air capacity will be up about 6 percent from a year ago, going a long way toward making up for the loss of service by Aloha and ATA airlines nearly two years ago.

Air capacity from Japan is also inching up after months of declines; Canadian flight capacity will be up nearly 37 percent starting in March.

Some other bright spots:

• Real estate prices have mostly stabilized and there are a steady stream of prospective buyers at open houses. The first day sale of stylish yet reasonably priced condominiums at the new Pacifica tower drew more than 50 people who camped out overnight to hold a spot in line, something we haven't seen in at least four years.

• Some stores and restaurants are seeing customers loosen up with spending, though this is by no means a solid trend. In fact, the Conference Board reported that consumer confidence nationally had plummeted in February after rising the previous month. Still, there are glimpses of retail recovery; Martin & MacArthur opened its fifth store last week with a new outlet in Waikīkī.

• Local tax revenue may be stabilizing. University of Hawai'i economist Carl Bonham said experts are cautiously expecting that numbers to be reported by the state Council on Revenues on March 11 "aren't going to be as bad as everyone thought."

"The biggest beacon of hope is that the bleeding seems to have stopped," he said.

But Bonham and others warn that this recovery is still fragile; at this stage it's not unusual to see the numbers seesaw from month to month.

The Hawai'i labor market is still sickly and is not pacing the recovery that is starting to appear on the Mainland. It may be the end of the year before the state sees any consistent job growth.

And the state's financial troubles continue to ripple through every community, with state workers taking home less money and businesses apprehensive about the potential for new taxes.

The recession isn't done with Hawai'i yet, but more people are feeling like we've come through the darkest part of this harrowing journey. So the best we can do is shelter the slender tendrils of recovery when we see them and hope for more encouraging news.