State forecasting grim economic forecast

LIHU‘E — Pushing back the reopening of trans-Pacific tourism from September to October and the two-week lockdown on O‘ahu has the state forecasting an even-grimmer economic picture than before.

The state is projecting the economy will contract by 12.3% in 2020, according to a state Department of Business, Economic Development &Tourism third-quarter report released last week that analyzes data between April and July 2020. In May, the department forecasted a 12.1% drop to the state’s economic-growth rate.

“The global COVID-19 pandemic is the most disruptive and challenging event in our lifetime,” DBEDT Director Mike McCartney said.

Tourism, which typically drives the state’s economy, has taken a hit, and visitor arrivals will not reach 2019 levels until 2025, the report found.

On Aug. 30, some 1,830 people arrived in the state.

During this same time last year, about 28,000 passengers arrived daily, including residents and visitors, according to the Hawai‘i Tourism Authority. Of those arriving Aug. 30 this year, 10 landed in Lihu‘e, including four visitors, one returning resident and five crew members.

The DBEDT forecast projects the state will only welcome 2.9 million visitors in 2020, a decrease of 71.9% from 2019.

During the second quarter, 1,932 visitors arrived by air on Kaua‘i. That time last year saw 352,662 visitors. This represents a 99.5% drop compared to the same quarter of 2019. This is the steepest decline in arrivals of all the islands, but not by much. Visitor arrivals by air decreased 98.6% in Honolulu, 99.5% in Maui and 98.9% in Hawai‘i County.

But when visitors do return, the state projects spending will be down for the next few years due to “decrease caused by weak demand.” DBEDT projects that visitor arrivals will increase to 7.2 million in 2021, 8.3 million in 2022, and 9.4 million in 2023.

Statewide, between 2017 and 2019, the state’s average unemployment rate was 2.5%. Between April and July of this year, the average unemployment rate was around 18.5%.

In mid-March, initial unemployment claims began to rise. Claims peaked at 53,112 during the first week of April. During the second week of August, initial unemployment claims continued above 5,000 per week. Between 2012 and 2019, weekly initial unemployment claims averaged 1,442 per week.

The unemployment rate on Kaua‘i jumped from 2.7% in the first quarter to 28.2% in the second quarter.

Kaua‘i County lost 8,200 jobs in the second quarter, most in the accommodation and food-services industries. Statewide, the hospitality sector accounted for 58.7% of joblessness.

The state is projecting an average annual unemployment rate of 10.9% this year, decreasing to 7.2% in 2021, then 6.6% in 2022 and 6.3% in 2023.

“We must unite around a single, immediate purpose to stop the spread of COVID-19,” McCartney said. “Let us rally around our health-care and public-health officials by doing our part to regain our community’s health so we can start and sustain our economic recovery.”

He pointed to federal funds, including $9.03 billion in pandemic response money, that can be injected into the economy.

“The safe and responsible reopening of trans-Pacific travel will create economic momentum,” McCartney said.

“Finally, it’s the collective spirit, inner strength, intelligence and innovative nature of Hawai‘i’s people that has always overcome disruptive and challenging events like we face today. Together, again, we will be able to accomplish great things.”

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Sabrina Bodon, public safety and government reporter, can be reached at 245-0441 or sbodon@thegardenisland.com.

14 Comments
  1. J.D. September 2, 2020 3:37 am Reply

    The government has installed a great amount of fear in people. Tourist’s will not come rushing back.


  2. J.d. September 2, 2020 3:43 am Reply

    Last week the CDC quietly updated the Covid number to admit that only 6% of all the deaths recorded actually died from covid. The other 94% had 2-3 other serious illnesses & the overwhelming majority were of very advanced age.


  3. J.D. September 2, 2020 3:47 am Reply

    The virus will run it’s course, face mask or no face mask, lock down or no lock down.


  4. J.D. September 2, 2020 3:53 am Reply

    We all no how Democrats love more and higher taxes. Businesses pay a higher tax rate then individuals and they are closing. The shut down is causing a huge government debt.
    Guess what will happen to your taxes. How will anybody be able to live in Hawaii.


    1. Loladog September 2, 2020 4:42 pm Reply

      Dear J.D.,
      Just facts: No does not mean know. Then is a temporal reference, whereas than is is a relative one. Tourist’s is a possessive form, as ‘it belongs to the tourist”. They teach this in elementary school.


      1. Everythingisawesome September 3, 2020 12:49 pm Reply

        Your so write!


  5. rk669 September 2, 2020 6:07 am Reply

    Political Leaders Destroy Hawaii’s Economy! PERIOD.


  6. jake September 2, 2020 6:10 am Reply

    Maybe this will finally motivate you noisy, smoky, dog barking, littering locals to get off the island for good and move to Vegas where you belong, folding casino hotel sheets.


  7. H.W. Silva September 2, 2020 8:17 am Reply

    Could this have something to do with the mass fear and panic and everyone’s willingness to shoot themselves in the foot?


  8. Uncle Sheet September 2, 2020 4:22 pm Reply

    Hey Jake, we resemble your remark about folding sheets…we prefer folding them here.


  9. Uncle Oldie September 2, 2020 4:45 pm Reply

    Now national news is saying only 6% of Covid19 deaths can be attributed to the virus itself, but instead the pre-existing diseases the people had are what caused their deaths. Something often put forward by commenters in this paper.

    Interesting the diseases are being called End of Life Diseases, an accurate name as ever brought forth. The drugs for those diseases are now called End of Life prescription drugs, how fitting.


    1. Doug September 3, 2020 9:22 pm Reply

      That’s not what happened. The CDC has stated the 180k dead are from COVID.


  10. Da Shadow September 3, 2020 2:49 pm Reply

    our government, killing us softly.


  11. Uncle Oldie September 4, 2020 12:07 pm Reply

    Now on national news it is saying only 6% of Covid19 deaths can be attributed to the virus itself, but instead the pre-existing diseases the people had already are what caused their deaths. Something often put forward by commentaters in this paper for months now.

    Interesting the diseases are being called End of Life Diseases, an accurate name as ever brought forth. The drugs for those diseases are now also called End of Life prescription drugs, how fitting.

    If this 6% new statistic is anywhere near true, the Quarantine and testing should be ended NOW ! ! !

    Enough already of financial ruin of our families; and NO ALOHA from the Aloha State. End the Quarantine !

    Even all the positive testing never showed need of hospitalization or sick people anyway, it only showed how many people had developed immunity on our collective way to herd immunity. Even positive covid19 testing was reported as bad when it was plain old natural immunity taking place for the good of the community.

    End the Quarantine !

    It has been amazing how many people are ignorant of viruses and personal immunity, and how much they are willing to put their lives and health in the hands of politicians.

    End the Quarantine !

    Gov. Dave showed incompetence with the fake missile crisis, and now again with the Covid19 virus. Resign Dave put a real educated and informed, and not “ill”advised by his so called advisors, and take the Lt. Gov., another medical misinformed professional perpetuating the false reporting on all levels.

    End the Quarantine !

    This whole thing has been a disgrace on the medical profession greedily false reporting and waiting for the sales in risky vaccines, they’ll undoubtedly cover up those vaccine bad side effects too, and selling more prescription drugs for the side effects.

    End the Quarantine !

    You go to the hospital to get well, but you get only drugs and then too often you can die, in the hospital. How many dead people are hauled out of hospitals every day in the USA?

    End the Quarantine !

    I agree let’s follow the natural path in life. Put your life in the hands of Mother Nature, God’s personal representative on Earth.

    End the Quarantine NOW !


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