Posted on: Sunday, December 30, 2001

2001: Trouble and triumph
Hawai'i's outlook at a glance

Advertiser Staff

Although they differ on details, most Hawai'i economists and analysts don't expect the state's economy to begin growing again until the middle of the coming year — and even then the growth is expected to remain small.

Further declines in jobs, tourism and income are forecast for the next few quarters because of the Sept. 11 attacks and the ensuing shock to Hawai'i's tourism industry. Getting growth back to where it was before the attacks could take a year or longer, according to forecasters.

The state estimates that some areas of the economy are improving more than others, but it may be months before all areas are experiencing a clear recovery.

Available evidence suggests that if there are no further air security incidents, most sectors of Hawai'i's economy should be showing consistent improvement by the second quarter of 2002.

However, the period of recovery to reach pre-Sept.-11 levels of activity will be long and may not be reached by all sectors until the last half of 2003. Major economic forecasts in Hawai'i since Sept. 11 all project depressed visitor arrival numbers well into 2002.

The state Department of Business, Economic Development and Tourism forecasts Hawai'i's visitor arrivals to end this year off 9 percent from last year — about 627,000 fewer visitors than in 2000.

Overall job growth this year is forecast to be slight as dozens of companies have laid off or reduced hours for thousands of workers since the attacks. The state's jobless rate could range from 5.5 percent to as high as 6 or 7 percent. That would mean 36,000 to 42,000 of the state's approximately 600,000 workers would be out of jobs.

The hotel, retail and transportation sectors will be the hardest hit, because tourism has borne the brunt of the economic shock, forecasters say. The hotel industry is expected to lose 6,400 workers, about 16 percent of the hotel work force, by the first quarter of next year.

State economists have estimated that, depending on the severity of the downturn through December, Hawai'i could lose 5 to 10 percent of its total visitor arrivals for this year, $492 million to $1.3 billion in gross state product and as many as 24,000 jobs.