A red-hot economy couldn't keep Hawai'i from taking home failing grades on a report card released yesterday that assessed the state's potential for economic growth.

The Washington, D.C.-based Corporation for Enterprise Development, or CFED, gave the state "F" grades for business vitality (a measure of business competitiveness) and capacity for future development. Hawai'i earned a "C" for the performance of its economy, which boasts the nation's lowest jobless rate at 2.7 percent in December.

That's worse than last year when CFED gave Hawai'i a "B" for economic performance and failing grades in the other categories.

The CFED, an advocate of economic opportunities for the poor, based its 19th annual Development Report Card for the States on 68 measures ranging from an area's crime rate and air quality to its industrial diversity and record for creating new companies and jobs.

In terms of poverty rate and income distribution Hawai'i ranked in the middle of all states.

However, Hawai'i workers face the highest rate of forced part-time employment and the state's quality of life suffers from high crime, weak participation in the democratic process and a low homeownership rate, according to the report card.

"While Hawai'i's overall returns on this report card are not encouraging, there are still a number of areas where the state is excelling," said Beadsie Woo, senior economist for CFED.

"Hawai'i's manufacturers are investing strongly in production capacity, and the state's businesses are on a par with their Mainland peers in terms of openings and survival rates."

Reach Sean Hao at shao@honoluluadvertiser.com.