New report: Hawaii may see double digit economic downturn in 2020
The Hawaii Department of Business, Economic Development and Tourism (DBEDT) released its second quarter 2020 Statistical Economic Report on Friday. The report details the current economic situation in Hawaii and estimates the long-term changes brought on by the COVID-19 pandemic.
Hawaii has been one of the hardest hit states economically due to the pandemic. According to the report, Hawaii’s April 2020 unemployment rate was 23.5% — the third highest in the nation. These job losses were primarily in the accommodations, food services, and retail trade sectors. At the beginning of May, says DBEDT, Hawaii ranked first in the nation for percentage of workers that had lost employment income (59.2%).
Based off the immediate impacts already seen in the state, DBEDT projects Hawaii’s economic growth rate will drop by 12.1% in 2020, and will then increase slowly at 0.7% in 2021, 0.6% in 2022, and 1.1% in 2023.
DBEDT also predicts the unemployment rate will improve in May and June, and will average out to 8.6% in 2020. The rate will steadily decrease each following year but will still be 6.2% in 2023 – much higher than Hawaii’s average 2.5% rate from 2017-2019. Even with federal aid, nominal personal income is estimated to decrease by 10.2% in 2020.
The new economic report also describes impacts on the tourism industry in terms of new visitors. The number of visitor arrivals for all of April was 3,565. The average daily visitor arrivals in 2019 was 28,562. Visitor arrivals have started to improve in May.
The report states Hawaii will welcome 3.4 million visitors in 2020 (67.5% lower than the 2019 level). From there, visitor counts will increase to 6.2 million in 2021, 8.3 million in 2022, and 9.4 million in 2023.
Based off trends seen during the 2009 Great Recession, the report forecasts it will take six years for the number of arriving visitors to reach the 2019 level, and it will take two years for non-tourism businesses to recover to the 2019 level in terms of job count.