A. Constance H. Lau, president and chief executive officer, Hawaiian Electric Industries Inc.
Hawaii's current economic situation is stabilizing after several years of good growth. Overall, we are faring well in contrast to the national outlook.
While there have been some high-profile business closures, including Aloha, ATA and Molokai Ranch, and the pull-out of two Norwegian Cruise Line ships from Hawaii, we are hopeful that expanded service by other carriers and Hawaii Tourism Authority's advertising and promotional campaigns will help mitigate some of the longer-term impacts to tourism, including creation of jobs for displaced employees.
On a more positive note, federal government and military spending continue to be stable sources of revenue for businesses and jobs for residents. The recent decision by the Army to permanently station a Stryker Brigade in Hawaii will bring $250 million of additional construction projects to Oahu and the Big Island. And, while unemployment has risen, it is still relatively low at 3.1 percent.
The downturn after the 2001 terrorist attacks was immediate and relatively short-lived and was followed by a long period of economic expansion driven in part by increased military spending in response to 9/11. The current slowdown is very different as it has been caused by the subprime debacle and turmoil in the credit and financial markets. Thus, while Hawaii has remained relatively stable, this slowdown is happening against the backdrop of a national slowdown, and there is no structural change like after 9/11, where significant increases in federal government expenditures provided a new growth engine for Hawaii to offset the sharp downturn in tourism after 9/11, so our recovery this time may take several years.