The September 11th attack
Honolulu economy could shrink 1.5%

By Frank Cho
Advertiser Staff Writer

A new study predicts only tourism destinations Las Vegas, and Orlando, Fla., and airline hub Fort Worth, Texas, will be hit harder than Honolulu by the economic fallout of the Sept. 11 attacks. Christie Wilson • The Honolulu Advertiser

The attacks will cut economic growth in all of the top metropolitan areas, but tourist sites catering to fly-in visitors will be among the most affected, according to the Economy.com analysis.

That, of course, describes Honolulu, where the study predicts the economy will shrink by 1.5 percent by the second quarter of 2002. That would cut about $500 million off the city's Gross Municipal Product, the measure of all goods and services sold in that quarter.

Only the economies of Las Vegas, Orlando, Fla., and Fort Worth, Texas, are forecast to suffer more than Honolulu.

Mark Zandi, chief economist at Economy.com, a West Chester, Pa.-based economic forecasting firm, analyzed the attacks' implications. Economy.com provides economic, financial and industry information to government and private agencies.

Zandi said none of the top 318 metropolitan areas in the ranking will benefit economically from the shock.

Las Vegas is dependent on the gaming industry. Orlando has seen a big drop in visitors. And in Fort Worth, the Dallas-Fort Worth Airport, one of the largest employers in the area, has been hard hit.

Honolulu might have led the list of worst damaged if the survey had not taken into account where each city's economy stood before the attacks. Honolulu had one of the slowest economic growth rates prior to the attack, whereas Las Vegas is dropping from a lofty spot in the economic ranking of cities.

The economic impact of the terrorist attack on tourism also could have been worse if it came at the beginning of a high tourist season, the study said.

"September is a traditionally slow time for the visitor industry so if this had to come, now is as good a time as any," said Andy Kish, associate economist at Economy.com.

Military employment and its ripple effects are a big unknown for Honolulu. "Things can go either way depending what happens to them," Kish said.

"If there is a big influx of spending, that could be a good thing for the economy," he said. "On the other hand, if those people are called to duty and have to leave Honolulu that could destabilize the local economy."