1. Economic Outlook 2000-01 2000 Efficient Electro-Technology Conference September 7, 2000

2. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Economic Outlook 2000-01 2000 Year to Date *Hawai‘i economic engine firing on all cylinders. *Alan Greenspan—carrier pilot or miracle worker? 2000-01 Economic Outlook *US economy still leads world wide expansion. *Hawaii’s economic strength causes wage and price inflation.

3. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Hawai ‘ i Economy Roars Ahead Visitor Industry Strong State Wide

4. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Honolulu County Visitor Statistics

5. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Maui County Visitor Statistics

6. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Hawai‘i County Visitor Statistics

7. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Kauai County Visitor Statistics

8. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Hawai ‘ i Economy Roars Ahead Construction Sector is HOT *Real contracting expands-- fastest rate in 10 years *Single family home and condo resales strong *Average home prices rise on Oahu. *Permits growth signals continued strength

9. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Honolulu County Construction Permits

10. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Maui County Construction Permits

11. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Hawai‘i County Construction Permits

12. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Kauai County Construction Permits

13. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Oahu Inventory Remaining Source: Honolulu Board of Realtors

14. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Hawai ‘ i Economy Roars Ahead Job Growth Strongest in 10 years *Contracting and Oahu lead strong job growth *Employment growth continues to exceed job growth *Unemployment rate near US rate lower than CA

15. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Total County Job Growth

16. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Honolulu County Job Growth Returns

17. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Maui County: Contracting Jobs Surge

18. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Hawai‘i County: Contracting Booming

19. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Kauai County: Growth in Retail & Hotels

20. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO County Unemployment Rates Decline

21. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Hawai ‘ i Economy Roars Ahead Expanding Economy Grows Real Tax Base *Retail & Hotel tax base grow with visitor industry *Wage income growing at over 6% *GE tax base expanding more rapidly than income

22. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Hawai ‘ i Economy Roars Ahead Income Growth and Prices *Nominal income grew by more than 4% in Q1 while wages grew by almost 9%. *Inflation returns as expected *Withholding Taxes increase more than 4%

23. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Is the Landing Gear Down? US Energizer Bunny expansion continues to set records 112 months and still going strong Necessary ingredients for soft landing: *No mistakes by Fed! *Continued productivity growth *Slowing consumer demand (aka less than 20% annual return on Nasdaq!) *Some easing of labor markets

24. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Is the Landing Gear Down? Soft landing pluses *CPI inflation only 3.5% through July. *Productivity up 5.1% over past year—biggest annual gain in 17 years. *July housing starts declined to 1.51 million annual rate lowest level since Nov. 1997. *US unemployment rate inched up in August to 4.1% *NAPM index declined in August—factory orders posted largest decline ever in July, falling 7.5%. *Index of leading economic indicators down for third straight month in July. *Sales of existing homes fell 9.8% in July (higher mortgage rates).

25. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000 Year to Date: Is the Landing Gear Down? Soft landing minuses *CPI inflation 3.5% through July. *Real GDP grew at an annual rate of 5.3% in 2nd Qtr. *Industrial production is up 5.8% over last year through June. *New orders for durable goods up 9.9% over last year. *Sales of new homes jumped 15% in July, the largest increase in more than 7 years.

26. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000-01 Outlook US still Leads World Economic Growth

27. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000-01 NASDAQ Growth Forecast

28. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000-01 Outlook: All Sectors Contribute to Growth Visitor growth expected near 5 % Real contracting will expand at near 15 % rate Job and employment growth continue at 2-3% Real income to grow over 3% Inflation will accelerate to 2.3% rate and beyond with rising rents.

29. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Visitor Arrivals Growth to Remain Strong

30. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Expected Contracting Growth Strongest in 10 years

31. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Labor Market Firm—Shortages?

32. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Real Income Growth Strengthens

33. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO Honolulu Inflation Catches US Rate

34. UHERO Quarterly Economic Outlookhttp://www2.hawaii.edu/~UHERO 2000-01 Outlook