Economist predicts bright future for area

Unless oil prices hurt air travelBY DENNIS WILKEN

TGI Staff Writer

LIHU’E — Paul Brewbaker, the chief economist for the Bank

of Hawai’i, anticipates “a really good year” economically across the state and

on Kaua’i.

Brewbaker, speaking Wednesday at a meeting of the Kaua’i County

Council, acknowledged that his message had only recently changed.

“It’s

nice to bring good news,” he said, adding that the state is “out of the

stagnation” of the 1990s.

“There is one wild card” which could negatively

affect the statewide economic recovery, Brewbaker said, “and that is petroleum.

Oil is important for Hawai’i because we are an energy-consuming

state.”

There’s “not much we can do but pay the price” of oil, he said,

explaining that although oil prices in the last decade got as low as $10 a

barrel, they climbed steadily back into the $30 to $35-a-barrel

range.

Brewbaker said the increase is important because it could affect

airfares.

The North American tourist market, fueled by reasonable airline

ticket prices, was a big part of Hawaii’s latest economic

rebound.

Brewbaker also noted the Asian economic slump of the ’90s, which

cut deeply into Hawaii’s other major tourist market, was over for everybody but

the Japanese.

“The consensus forecast for Hawai’i is that the state

(economy) will grow at about 3.5 percent for the next two calendar years,”

Brewbaker said.

National growth is projected closer to 4

percent.

Brewbaker also noted Hawaii’s unemployment rate has shrunk from 6

percent to 4 percent, which he said is better for employees than

employers.

On Kaua’i, unemployment is down from 7.3 percent to 6.7

percent.

“People aren’t moving to Hawai’i in as great of numbers as they

were” 10 years ago, Brewbaker said. “And the birthrate is lower than 25 years

ago. The labor market will probably tighten up fairly quickly, making it

difficult to find qualified employees.”

He said that would offer more

options for multi-talented job-seekers.

Brewbaker said the tendency of

tourists to now fly directly to the island they wish to visit has been an

especial boon for Kaua’i. The number of people coming straight here is up 8.1

percent, and the hotel occupancy is 75 to 80 percent, he said.

Talking

about the growing timeshare industry in Hawai’i, Brewbaker said, “The market

seems to have made the decision. Time share is what the market is going to pay

for.”

The economist ended his hour-long presentation with a gaze into his

crystal ball.

“Economists make forecasts, but I’ll make a prediction. The

campaign issue of the next governor’s race in 2002 will be affordable housing,”

Brewbaker said. “In the 1990s, there was too much (housing) produced.

“But

that’s going to change very rapidly with the strong economy. And if you don’t

build the housing for the people who want to work here, everyone will be paying

higher rents.”

Staff writer Dennis Wilken can be reached at 245-3681

(ext. 252) and dwilken@pulitzer.net

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