2000 economic outlook hawaii economic association annual conference april 28, 2000
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2000 Economic Outlook
Hawaii Economic Association Annual Conference April 28, 2000
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
2000 Economic Outlook
• 1999 Year in ReviewBusiness cycle expansion signals clear end to growth recession
• 2000 Economic Outlook* US economic expansion continues amazing run
* Japanese economy showing some signs of growth
* Hawai’i economic engine firing on all cylinders
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
1999 Year in Review
• Visitor Industry Returns to Growth* Decline in eastbound arrivals slows
* Westbound arrivals growth strong
* Room rates rise 1.7 %
1997 1998 1999Eastbound Visitors -1.0 -10.9 -5.9Westbound Visitors 1.8 4.1 6.1Total Visitors 0.7 -2.0 1.6
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
1999 Year in Review
• Construction Sector Bottoms Out* Real contracting tax base still falling in 99
* Home resales continue strong
* Permits growth signals rebound in construction
1997 1998 1999Real Contracting -9.9 2.5 -1.8SF Home Resales 26.0 15.0Total Permiting 5.5 -10.6 33.0
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
1999 Year in Review
• Job Growth Returns* Non agricultural jobs growth best in six years
* Employment growth picks up
* Unemployment nears US average by year end
1997 1998 1999 2000Q1Non Ag Jobs 0.2 -0.1 0.5 1.8Employment 0.2 0.2 0.7 3.1Unemployment Rate 6.4 6.2 5.6 4.8
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
1999 Year in Review
• Expanding Economy Grows Real Tax Base * Retail tax base grows with visitor industry
* Hotel tax base down in real terms
* Overall tax base expanding more slowly than income
1997 1998 1999Retail -1.4 -1.3 0.4Hotel Room 4.0 -0.1 -0.5Total GE Tax Base -2.0 -1.3 0.8
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
1999 Year in Review
• Income Growth and Prices * Nominal income growth exceeds 2% for third year
* Inflation returns to islands
* 1999 real income growth likely to exceed 2%
1997 1998 1999*CPI Inflation .7 -.3 1.0Real Income 1.8 2.7 2.2Real GSP 1.5 2.2 1.9
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
Year 2000: Global Outlook
• US Fairytale Expansion Continues To Set Records* No clear signs of end to expansion with consumer and
business spending strong
* Inflation still moderate
• Japanese Economy Recovering?* Real GDP grew by just 0.3% in 1999
* Government spending 47% of 1999 growth
* Business expectations, capital spending, and profit rates improving
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
US Income Growth StrongJapan ? We’re Still Waiting
19991997199519931991198919871985
8
6
4
2
0
-2
-4
US Japan
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
2000 Economic Outlook:All Sectors Contribute to Growth
• Visitor growth expected to exceed 1999• Real contracting will expand at 5% rate• Job and employment growth strengthens • Real income to grow at 2.6%• Inflation will accelerate to 1.8% rate
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
Visitor Arrivals Growth Will Exceed 1999
19991997199519931991198919871985
20
15
10
5
0
-5
-10
-15
Eastbound Westbound Total
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
Expected Contracting Growth Strongest in 10 years
200019981996199419921990
30
20
10
0
-10
-20
-30
40
20
0
-20
-40
Real Contracting Tax Base Permits
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
Labor Market Firms
19991997199519931991198919871985
6
4
2
0
-2
-4
Jobs Employment
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
Moderate Real Income Growth Continues
19991997199519931991198919871985
6
4
2
0
-2
-4
Real TPI Real GSP
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
Honolulu Inflation Still Playing Catch Up
19991997199519931991198919871985
8
6
4
2
0
-2
Hawaii U.S.
Hawaii Economic Association Conference April 28, 2000
http://www2.hawaii.edu/~UHERO
2000 Economic Outlook
1998 1999 2000 Personal Income (Current $) 2.4 3.2 4.4 Real Personal Income 2.7 2.2 2.6 Real Gross State Product 2.2 2.0 2.4 Consumer Price Inflation -0.3 1.0 1.8 Visitor Arrivals -2.0 1.6 4.0 East Bound -10.9 -5.9 1.0 West Bound 4.1 6.1 5.5 Real Contracting 2.7 -1.8 5.0 Non Ag Jobs -0.1 0.5 1.1 Employment 0.2 0.7 1.4