Honolulu Advertiser
By Greg Wiles
It could be a glimmer, or maybe just wishful thinking. But there are some signs that Hawai’i’s economy may be reaching the bottom of a pernicious downturn that’s ravaged employment rolls and uprooted some companies. No one is saying the economy has reached a recovery. But they note the steady worsening of the state’s economy may be ending, perhaps paving the way for a return to growth next year.
At Olsten Staffing Services in Honolulu, the phone is starting to ring a bit more often. Olsten and other temporary help firms had seen business decline over the past year as firms cut back on hiring and laid off people. But lately there’s been word that companies aren’t laying off as many people and in some instances are hiring.
“There’s a few more orders coming in for people,” said Olsten President Signe Godfrey.
“I’m not going to say it’s great, but we’re starting to see a little more uptick, which we haven’t seen in a long time.”
There are other signs the long economic winter is beginning to thaw with automobile dealers reporting a rise in buyer traffic generated by the “cash for clunkers” program.
This, after a precipitous decline in sales over the past two years.
The number of airline seats on scheduled flights to Hawai’i on a rolling three-month basis has increased in the past two monthly reports from the Department of Business, Economic Development and Tourism. There had been 14 months of consecutive declines in the report.
HOPEFUL SIGNS
Domestic visitor arrivals have stabilized in recent months on a seasonally adjusted basis, and O’ahu home and condominium sales are rising, said Paul Brewbaker of TZ Economics. At the same time, the number of jobs being lost in the downturn has been shrinking this year, he said. In December the state’s economy lost 6,400 jobs. By June that had shrunk to a loss of 2,550.
Brewbaker said his seasonally adjusted sales volume number for residential real estate shows the bottom may have been reached around the beginning of the year, as the data shows increases every month since then.
“There’s an increasingly broad pattern of stabilization,” Brewbaker said. Where Hawai’i is positioned in the economic cycle may be best illustrated through the alphabet.
Brewbaker said a decline and sharp rebound would have a V-shape, while an L-shaped curve would denote a economy that’s declined and has been stuck at a low level of activity.
His view is the Hawai’i economy is now along the bottom of a U-shaped economic cycle where there is a decline, a period of stabilization and then renewed growth. “If it’s U-shaped, then we’re going from one arm to another,” Brewbaker said. “It’s certainly not V-shaped. “No one is saying it’s L-shaped. That’s what everyone was saying six months ago.”
Alphabet soup aside, there are other factors pointing to the downturn hitting bottom. Brewbaker said Hawai’i’s economic cycle has increasingly been synchronized with the overall U.S. economy after previously being thought to lag the Mainland.
On Friday the U.S. Labor Department issued a report that many people took as further proof that the recession is ending. It reported the fewest number of jobs were lost in a year’s time and that worker hours and pay had edged upward last month.
That led President Obama to pronounce the worst of the economy may be behind the country. The Standard & Poor’s 500 Index has risen 11.9 percent since the beginning of the year.
“I think there’s more positive news than we had been seeing in the last year,” said Pearl Imada Iboshi, state government’s chief economist.
“If you go to Waikiki, it seems really crowded, at least this month. Definitely flights have been really full coming in and out of Hawai’i.”
Iboshi, who heads the economic team at the state Department of Business, Economic Development and Tourism, forecast in May that Hawai’i’s gross domestic product will decline this year, but will grow next year. It has similar projections for upturns next year in visitor expenditures and personal income.
The state will issue an updated forecast later this month, though Iboshi said she does not know at this time if any of the estimates will be revised upward.
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