Increasing vaccination rates upgrade Hawaii’s economic forecast
Economic conditions in Hawaii are improving, thanks to a strong vaccine rollout locally and nationally, as well as the dominant U.S. visitor market outperforming expectations.
According to a new forecast for the State of Hawaii from the University of Hawaii Economic Research Organization (UHERO), total visitor arrivals will climb to more than 70% of their pre-pandemic levels by late summer. However, international markets will be much slower to recover.
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Local employment gains have been limited so far, but the vaccine rollout in Hawaii and across the nation seems to set the stage for broader economic reopening by this summer. But UHERO predicts a full recovery will take several years to accomplish.
However, the U.S. visitor marker has outperformed expectations. Built up savings and pent-up demand will drive mainland arrivals to near-normal levels in coming months, according to UHERO.
More than half of the U.S. adult population has now received at least one dose of the COVID-19 vaccine, and — according to UHERO — full vaccination for more of the population will support a robust recovery. UHERO predicts that the U.S. economy will expand by about 6% this year. But slower vaccine rollout, especially in developing countries, will present a hurdle for global recovery.
In April 2021, the statewide number of daily visitors surpassed half of the pre-pandemic level with all of the recovery taking place in the domestic market. However, UHERO says the recovery of jobs has trailed tourism.
The forecast found that March 2021 payrolls were still more than 100,000 jobs below their pre-pandemic level. Despite this, employers report difficulty finding necessary workers, as the available labor force has been reduced by outmigration, ongoing virus concerns and family caregiving until schools reopen. While vaccination progress will support an improvement of job gains, the payroll job count will not approach pre-pandemic levels for several years..
UHERO credits the federal aid that provided essential support for Hawaii’s economy. The organization predicts a massive wave of recovery will come from the massive additional support in the pipeline. The direct aid to state and local governments will help to offset a significant portion of the previously projected budget shortfalls.
As of Tuesday, Hawaii has administered 1.5 million doses of the vaccine and the state’s average cases per day is 53.