Elevated Unemployment Rates Likely To Persist into 2021
Hawaii will likely see higher unemployment rates and weak economic activity well into 2021, according to the latest forecast from University of Hawaii economists.
Unsurprisingly, the state’s overall economic recovery will be closely tied to the performance of tourism, Hawaii’s largest industry.
The number of arriving visitors remains below 10 percent of previous levels, and six months into the pandemic, employment in the tourism sector is still less than half what it was at the start of 2020. That is according to the latest analysis from the University of Hawaii Economic Research Organization.
It is unclear what the next few months have in store. The planned easing of the state travel quarantine on Oct. 15 could provide a boost to desperately struggling food service and hospitality businesses. Conversely, concern about the safety of travel or subsequent outbreaks could depress visitor arrivals well into 2021.
Which way the proverbial winds blow will determine the short term trend of the local economy.
A quicker revival of tourism could return statewide unemployment to more normal levels by mid-2021. However, if public health conditions deteriorate again, or if there are significant delays in producing a vaccine and rapid testing, local unemployment could remain elevated into 2023.
In the case of the latter trend, a lagging economy will likely be exacerbated by continued declines in state tax revenue and possible furloughs for public workers.
However, there was one bright spot in the latest UHERO forecast.
The local construction industry has thus far avoided job losses. That's thanks to a surge in military building projects and rock-bottom interest rates, which have increased demand for home sales.
Read the full UHERO forecast here.