Neighbor Islands to hurt more | The Honolulu Advertiser

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Neighbor Islands to hurt more | The Honolulu Advertiser | Hawaii's Newspaper

Posted on: Friday, May 15, 2009

Neighbor Islands to hurt more

By Greg Wiles
Advertiser Staff Writer

If you live on O'ahu, your chances of suffering economic anguish from the recession are lower than if you reside on the Big Island, Maui or Kaua'i.

That's one of the findings of a new study by the University of Hawai'i Economic Research Organization, which says Neighbor Island economic troubles are more pronounced and that O'ahu's recovery will be faster.

"The downturns in tourism and construction are most severe on the Neighbor Islands, and so these counties will suffer a more severe recession than O'ahu," said the report.

"Government stimulus will help to support growth, but it will not be sufficient to avoid a long and painful contraction."

The report is in line with other UHERO forecasts that project continued economic slump for the state this year, with a slow recovery over the next several years.

Neighbor Island econ-omies are less diversified than O'ahu's, which benefits from having a large military presence and jobs attendant with being the state capital and commercial hub. And while it hasn't been immune from the recession gripping the rest of the country, the UHERO report shows O'ahu's hotel occupancy, job counts and personal income haven't fallen as much as they have on the Neighbor Islands.

It shows double-digit declines in tourism occurred last year in all counties and that the counts will continue to fall again this year.

Some of the drop is tied to the departure last year of two of the three NCL cruise ships that plied Hawai'i's waters and the fact that cruise ship passengers represent a larger share of Neighbor island tourism arrivals than they do on O'ahu.

"This year, there will be 6 percent or greater job losses in the accommodation and food service sectors on Maui and Kaua'i, and the Big Island will see a nearly 9 percent contraction," according to the report, titled "Neighbor Islands Bear Brunt of Recession."

"By comparison, Honolulu County will see jobs in the sector decline by 'only' 2.5 percent."

A similar relationship exists when it comes to total jobs and construction jobs, with O'ahu's tally falling less this year compared with other islands.

The report also shows:

O'ahu's economy, while better than other islands, will also endure a slow recovery. Personal income per person, a broad measure of economic health, will fall 1.9 percent this year and stage a tepid 0.2 percent recovery next year. In 2011, the increase will be a mild 1.2 percent.

Neighbor Island personal income per capita will fall at twice the O'ahu rate on the Big Island (4.7 percent) and Maui (4.6 percent) this year, while Kaua'i will be down 3.6 percent. All three counties will see slight contraction next year, before staging a slight recovery in 2011.

Tourism counts on the Neighbor Islands declined faster last year and are projected to have a bigger fall this year compared with O'ahu. But they also are scheduled to have a faster recovery, with more than double the 1.2 percent and 1.8 percent increases projected for O'ahu in 2010 and 2011.

All counties will show job growth in 2011. The bad news is that the increases will be less than 1 percent. All counties will show a dip in jobs this year, with O'ahu and Kaua'i experiencing minor gains in 2010.

"Job losses are now widespread in nearly all sectors of all counties," the report said.

"Recovery from these substantial job losses will take a number of years, and unemployment rates will remain high for some time."

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