2000 Economic Outlook Hawaii Economic Association Annual Conference April 28, 2000

Hawaii Economic Association Conference April 28, Economic Outlook 1999 Year in Review Business cycle expansion signals clear end to growth recession1999 Year in Review 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, Year in Review Visitor Industry Returns to Growth *Decline in eastbound arrivals slows *Westbound arrivals growth strong *Room rates rise 1.7 %

Hawaii Economic Association Conference April 28, 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

Hawaii Economic Association Conference April 28, 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

Hawaii Economic Association Conference April 28, 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

Hawaii Economic Association Conference April 28, 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%

Hawaii Economic Association Conference April 28, 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, US Income Growth Strong Japan ? We ’ re Still Waiting

Hawaii Economic Association Conference April 28, 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, Visitor Arrivals Growth Will Exceed 1999

Hawaii Economic Association Conference April 28, Expected Contracting Growth Strongest in 10 years

Hawaii Economic Association Conference April 28, Labor Market Firms

Hawaii Economic Association Conference April 28, Moderate Real Income Growth Continues

Hawaii Economic Association Conference April 28, Honolulu Inflation Still Playing Catch Up

Hawaii Economic Association Conference April 28, Economic Outlook