"United, American and Aloha added Mainland flights. Separate surveys have chosen Poipu Beach as the best beach in the U.S. and Travel & Leisure magazine chose Kalalau Valley as one of the most beautiful places in America," Laney said.

"In uncertain times, Kauai benefits from being exotic, but still on U.S. soil."

Laney noted the huge role that time-share units play on Kauai: "In 2001, Kauai had 37% of operated time-share units in the state, a remarkable percentage for a small island. Time-share visitors are a major reason Kauai was less affected after 9/11. Having already paid for their time, time-share owners did not cancel as much."

He said developing more educational options will be one key to diversifying Kauai's economy.

"As more younger, well-educated professionals come to live and work, they will demand quality education for their children, perhaps by expanding private if not public education," he said. "Leaders in tourism, agriculture, high-tech, government, and other areas all cite a need for better technically trained graduates."

Laney, who is also a professor of economics and finance at Hawaii Pacific University, made these points about Kauai County's economy:

Jobs and unemployment

"Overall job growth statewide was 2.5% in the first half of 2003. Those areas that depend more on Japanese tourism, such as Waikiki, are the only remaining pockets of weakness.

"In the same period, Kauai non-farm jobs surged a very strong 4.0% -- with broad growth across almost all sectors of the Garden Island economy. Kauai's jobless rate has been falling steadily, from 11.3 percent in 1997 to only 4.5 percent in the first half of this year."

Construction industry

"Construction on Kauai, boosted by record low interest rates, is booming now, and for the near future.

"Grove Farm recently expanded its Puakea golf course to 18 holes, and is undertaking a major renovation of Kukui Grove Mall. A new Home Depot is opening adjacent to the mall. A number of new residential lots are being made available adjacent to the Puakea area.

"Alexander & Baldwin and its partner, DMB Associates, will add as many as 1,500 upscale single-family, multi-family and resort units as they develop Kukui'Ula on the South Shore.

"Nearly half the space is committed at A&B's Port Allen Marina Center.

The Grand Hyatt in Poipu will undergo renovation this year and next. And Marriott expects to have the Waiohai in Poipu finished as a time-share property by mid-2004."

Housing sales, prices

"Real estate sales and prices have been climbing steadily thanks to low interest rates -- most noticeably in the Princeville area, where prices may have been a bargain earlier."

Laney said the number of sales this year will be nearly triple the rate of 1997 and the median price of a single-family home is running over $350,000 this year.

"In an environment of accelerated development, many people on Kauai are concerned that infrastructure -- roads, airports, harbors -- is not keeping up due to strained public sector budgets. Another worry is that the residential housing being built is mostly aimed at upscale buyers, causing anxiety that local buyers of more modest means are being crowded out of the market."

High tech on Kauai

"High-tech jobs are growing on Kauai, led by the Pacific Missile Range Facility and its subcontractors. Such diversification, especially into higher-income jobs, is welcome for a tourism-dependent economy.

"Each time the Missile Range hosts an exercise, there are over 300 visitors -- an estimated direct injection into the economy of $3 million per exercise."

Laney noted that the four-year-old first phase of the Kauai Visitor and Technology Center is now fully occupied, a second phase was completed earlier this year and Solypsis Corporation now occupies 21,000 square feet in a third phase in Kukui Grove Mall.

Agriculture

"Gay & Robinson, one of only two remaining viable sugar plantations in the state, is expanding. This year, G&R expects its largest crop ever -- 57,120 tons of sugar. G&R plans to lease and cultivate 4,000 more acres of State land previously leased by AMFAC's Kekaha Sugar."