ECONOMY
Counties' economic growth at standstill
By Greg Wiles
Advertiser Staff Writer
Hawai'i's counties are sharing about equally in an economic vog that will hang over the state this year and lift only slightly in 2009.
Those are among the findings of a new forecast by the University of Hawai'i Economic Research Organization, which notes economic growth is slowing to a stop this year as Hawai'i deals with the loss of airlines, cruise ships and Japanese visitors.
"The counties find themselves really in a similar position — across their economies their growth has slowed to a virtual standstill," said UH's Byron Gangnes, who co-authored the study with fellow economists Carl Bonham and Leroy Laney.
The report follows others this year that have predicted Hawai'i's economic environment in 2008 will be much different than recent years, with little or no growth occurring. It was only two or three years ago that employers had a tough time finding employees, homes sometimes sold within a matter of days, and the visitor industry boomed with the cruise ship business.
While a slowdown in growth had been forecast coming into this year, a series of economic shocks has rocked the state, including the shutdown of Aloha and ATA airlines, the departure of two NCL America interisland cruise ships, the shutdown of Molokai Ranch and the loss of jobs at other companies. The new report by UH economists differs from others this year in offering a projection for each county.
It shows real personal income, an economic measure closely watched by economists, will either be sluggish or in decline this year depending on the county. It will range from a gain of 0.3 percent on O'ahu to a decline of 0.3 percent on Maui.
On the Big Island, real personal income is forecast to rise 0.2 percent, while it will fall by the same amount on Kaua'i.
Robert Campbell, president and founder of Maui Printing Co., a 20-year-old printing and graphic design business in Kahului, said he does see some weaker companies having trouble and that some people were panicky when ATA, a major carrier between Maui and the Mainland, ceased operation.
"It has been kind of interesting," Campbell said. But "guys who have been in business for a while know there are the ups and downs."
"They are cautiously optimistic that things are going to be OK."
REVISED FORECAST
The UH economists' latest forecast revises downward the group's county projections made last year. The group said it now expects it will be several years before the Islands return to moderate economic expansion.
For O'ahu it projects the number of days spent by tourists on the island will decline 2.6 percent in 2008.
The forecast is for the weakness to persist in the O'ahu's visitor industry for the next several years. It said construction, another mainstay of the state's economy, has remained relatively healthy and likely will experience a soft landing in coming years.
Those factors combined will translate into anemic job and employment growth over the next several years. O'ahu payroll jobs will decline 0.1 percent this year and remain unchanged next.
Other projections include:
'IT'S MIXED'
That setback for the visitor industry will accompany a moderate decline in construction jobs and a decline in total payroll jobs by 0.7 percent.
Jeff Turner, owner of Aloha Business Services in Kailua, Kona, said business is tightening up for some of his construction clients, while tourist-oriented merchants along Ali'i Drive are off a bit. But he said other clients report they are booked up with business.
"There are a few people that are really struggling and I have some clients that are doing very well," Turner said. "It's mixed."
Otherwise the current pause in the economy may have a silver lining, he said.
"This isn't a depression," Turner said. "It's a healthy time to catch our breath and digest this out-of-control growth we've been having."
UH's Gangnes also noted the slowdown follows a period of unemployment when employers had a tough time finding enough qualified people and that the stimulus checks will help real personal income growth from turning negative on O'ahu and the Big Island.
"Businesses couldn't find workers two years ago," Gangnes said. "We're at a healthy starting point."
But he noted the snapback from the economic pause won't be quick. That's because at this time it doesn't appear there is anything that will provide a catalyst for a big jump in growth in coming years, Gangnes said.
Reach Greg Wiles at gwiles@honoluluadvertiser.com.
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