The September 11th attack | Coping with the aftermath
Economic upturn appears distant

Advertiser Staff

The latest forecasts assessing the long-term economic effects of the Sept. 11 attacks on Hawai'i and the nation hold little hope for a rebound anytime soon.

In a series of reports last week by top economists in the state, most agree that Hawai'i's economic growth likely will be dampened well into next year as tourism, the state's No. 1 industry, struggles to recover from the post-attack grounding of all flights, a wave of travel cancellations, plummeting retail sales and hotel occupancy, multimillion-dollar corporate losses and a wave of layoffs.

While visitor arrivals have gradually increased since the attacks, they are still off as much as 20 percent. And while tourism is expected to begin to return to previous levels by mid-2002 — with growth returning by late next year — broad economic momentum in the Islands likely won't be regained until the fourth quarter next year.

Until then, forecasters say, unemployment in the state likely will continue to rise — from its recent 4 percent or so to more than 5 percent — and personal income will continue to drop.

How Hawai'i's economy fares will depend, in large part, on the national economy, where a number of recent indicators are raising concern that the country likely has slipped into its first recession since 1991 and that an anticipated rebound will take longer than expected.

Reports last week showed the nation's unemployment rate soared to 5.4 percent in October, the biggest one-month jump in more than 21 years, and the economy shrank at a rate of 0.4 percent in the July-September quarter, with economists forecasting an even bigger drop in the current October-December quarter.

Meanwhile, Americans' growing fears about continued fallout from the attacks, new worries about job security and anthrax in the mail dragged down consumer confidence in October to its lowest level in 7 1/2 years.