Kaua‘i’s economy is back on a firm growth path, according to a new report from a University of Hawai‘i economics think tank. Watch for record levels of Mainland visitor arrivals next year, and a continued strong real estate sales and
Kaua‘i’s economy is back on a firm growth path, according to a new report from a University of Hawai‘i economics think tank.
Watch for record levels of Mainland visitor arrivals next year, and a continued strong real estate sales and upscale home construction.
The report from the University of Hawaii Economic Research Organization shows that though the economy is still below peak levels reached in 1999, the Kaua‘i visitor industry is vigorous
This year and next promise to be good ones for the local economy, with moderately strong growth, the report shows.
“Over the next two years, tourism-related jobs will fully recover the losses they suffered after 9/11,” the report states. “Hotel jobs are expected to rise 2.7% this year after falling 4% in 2002. Wholesale and retail jobs are also expected to surpass their levels in 2000, growing 3.2% by the end of the year. Also, air transportation jobs are expected to grow 3% this year. Over the medium term, hotels and related trade businesses will resume their traditional role as the core economic engine on Kaua‘i.”
Buoyant Mainland travel will push overall visitor arrivals up 1 percent this year, with somewhat stronger growth in how many days visitors stay on Kaua‘i due to longer vacation stays.
The UH analysts see the visitor count rising about 6 percentage points in 2004 due to a return of Japanese travelers .
Historically-low lending rates are behind the boom in Kauai’s construction sector, and while rising interest rates will begin to be felt in the coming year, robust building permit issuing activity suggests that high levels of construction employment can be sustained in the near term.
“Residential permits grew 28.6% in 2002, rising for the fifth straight year,” the report shows. “Construction jobs Non-tourism services, such as medical care and other business services, will also see relatively strong growth.
Overall job growth in the Kaua‘i economy will be about 3.6 percent this year, better than the 3 percent rate expected for Hawai‘i as a state.
Real (inflation-adjusted) personal income will expand more than 4 percent this year and 3.3 percent in 2004.
Nominal (current dollar) income will grow by nearly 6 percent in both years.
In the long term Kaua‘i’s economy is looking strong and steady, the report states, with continued growth at the Navy’s Pacific Missile Range Facility, and tele-commuters bringing paychecks and investment dollars from off-island through Internet hookups.
“Beyond Kauai’s short-term prospects are a number of key long-term challenges. A perennial issue is the desire to diversify the economy. Diversification on a limited scale has been occurring in recent years, as non-hotel service industries in particular gradually play a larger role in the Kauai economy. Progress in creating desirable high tech jobs is evident in the expansion of activities at PRMF and anecdotal evidence of in-migration by skilled individuals able to work at a distance from their job or market. The impact of these changes on official job statistics is limited so far.”
UHERO prepared their Kauai Economic Outlook paper under a grant from the County of Kaua‘i’s Office of Economic Development. The Outlook report is part of a County of Kaua‘i initiative to provide improved data and analyses on the Kaua‘i economy for public and private sector decision makers.
Other UHERO research under this grant includes ongoing surveys of business and consumer attitudes and the development of an online economic database.
On the Web:
http://www.uhero.hawaii.edu
County of Kaua‘i’s Web site at http://www.kauai.hawaii.gov/OED/
