KALAPAKI BEACH — There is a standard response to those who are lauding Kaua’i for doing the best among the islands since September 11, to economists who calm fears by saying “This is not the end of the world,” and
KALAPAKI BEACH — There is a standard response to those who are lauding Kaua’i for doing the best among the islands since September 11, to economists who calm fears by saying “This is not the end of the world,” and to those who say because of the island’s natural beauty, independent niche marketing efforts, non-dependence on Japanese visitors and strong timeshare percentage among visitor accommodations the island has been somewhat insulated since the fall terrorism events and aftermath:
Tell that to our neighbors who lost their jobs.
The fact is that current statistics are painting a muddled picture of how exactly the island’s economy is really doing, with high numbers of claims for unemployment benefits, sold-out periods at some hotels while neighboring properties more dependent on Japanese visitors are less than half-full, indications that both the construction and real estate sales industries remain strong despite the international events, and other seemingly contradictory indicators.
There are a few truisms, however, many of them put forth by Dr. Leroy Laney, professor of economics at Hawai’i Pacific University at the annual Kaua’i Chamber of Commerce general membership meeting at the Kaua’i Marriott Resort & Beach Club Thursday evening:
– That rare double whammy of having simultaneous recessions in both the mainland United States and Japan (and Europe) is not good news, and until a turnaround happens in one or both of those economies, Hawai’i tourism will continue to struggle. In recent memory, Hawai’i has been able to survive a recession on either end of the Pacific because it had a strong economy on the other side of the ocean to bolster it;
– If the number and value of Kaua’i construction permits continued as strong for the second half of the year as it did the first half, the activity would have surpassed that experienced during rebuilding here after Hurricane ‘Iniki in 1992;
– As long as interest rates remain low, Laney and local Realtors will continue to see island-wide buying activity;
– Especially in the wake of the events of September 11, a diversified, non-visitor-dependent industry like the burgeoning high-tech one centered on Kaua’i’s west side near the U.S. Navy Pacific Missile Range Facility is truly a blessing. “At times like this, Kaua’i and any place else in Hawai’i should be thankful for economic stimulus not associated with the travel industry;”
– Uncertainties regarding the war effort, safety of air travel, and threat of further terrorist attacks continue to impact the traveling public, hitting hard especially Hawai’i, which depends on visitors arriving on airplanes;
– Economic uncertainties make this “by far the most complex and uncertain forecast I have ever had to make,” though the state is certainly in a recession now that will extend into next year;
– As is traditionally the case, economic recovery depends largely on the return of visitors to the state. “The real story lies in the visitor numbers. Until we see improvement here, our problems will not be over.”
Laney’s forecast for 2002 (please see the chart) shows a negative number only in the job-growth column, but he warned that the 2002 positive numbers are compared to 2001 results, when the economy in one day in September went from “pretty good” to “catastrophe.”
Next year will see, “we hope,” a shift from “bad” to “recovery,” he predicted.
Laney said the mood and conditions on all the other islands are better than those on Japanese-dependent O’ahu.
And while the end of recession will be signaled when positive economic growth returns to the state (likely around the second quarter of 2002), Laney told the crowd of nearly 200 people that getting some indicators back to pre-September-11 levels “will take longer, perhaps not until closer to 2003.
“Then, a strong mainland recovery, hopefully a healthier Japan, renewed confidence by the traveling public, and a more stable world situation will coalesce to bring us a better economy,” he concluded.
Business Editor Paul C. Curtis can be reached at pcurtis@pulitzer.net or 245-3681 (ext. 224).
