Laney: Maui and Kauai economies are on the mend

According to economist Leroy Laney, Maui may have seen the worst from the recent economic downturn, and it shouldn’t be long before the county starts seeing job growth again, and Kauai has reasons to be optimistic about its economic future as tourism and other sectors show signs of life.

However, Maui has not seen job growth return yet, and when it does it will have further to go than the state as a whole before its rebound is complete, Laney said Sept. 2 at the 36th-annual First Hawaiian Bank Economic Outlook Forum at the Maui Beach Hotel.

“Barring any unforeseen misfortunes, an economic recovery is now under way or at least imminent for the Maui economy, but don’t expect a rapid return to normal,” said Laney, First Hawaiian Bank’s economics adviser and a professor of economics and finance at Hawaii Pacific University.

While Maui’s labor market continues recovering, growth in visitor spending, arrivals and flight options are fueling the tourism rebound. Hawaiian Airlines, Alaska Airlines, WestJet and Air Canada have all taken an increased interest in Maui, Laney said.

Other segments of the economy, including home sales and post-secondary education options, also are helping the economic rebound in Maui, Laney said. Price declines and low mortgage rates helped fuel a big increase in home sales, and Maui Community College had the largest enrollment increase in the University of Hawaii system last year, he said.

Other segments of the economy, from construction to agriculture, still have a ways to go. During the first quarter, building permits were down nearly 50 percent compared to the same quarter last year, while pineapple production took the biggest hit in the ag sector, Laney said.

Meanwhile, the Garden Isle of Kauai will not see job growth immediately, Laney said Sept. 22 at the 36th-annual First Hawaiian Bank Economic Outlook Forum at the Grand Hyatt Kauai Resort.

“Led by its economic mainstay of tourism, Kauai can look forward to better times in the future,” he said, noting that more nonstop flights are arriving at Lihue Airport, with more on the way as Canada’s WestJet brings seasonal service to Lihue and Hawaiian Airlines begins flying to Seoul, South Korea.

Other tourism developments include Kauai being ranked the second best island in the world by Travel+Leisure magazine, increased activity in Kauai vacation rentals, and new restaurants such as Roy Yamaguchi’s The Tavern at Princeville and Jean Marie Josselin’s Tapas opening on the island.

Kauai’s residential real estate market is recovering, Laney said. Sales are increasing this year after declining moderately in 2009, and drops in the median prices were much smaller than in 2009, he said. In the agriculture sector, the seed corn industry is expanding, and three Hollywood films — “Descendants,” “Just Go With It” and “Pirates of the Caribbean” — filmed on Kauai.