UHERO Forecast 'Sort Of More Optimistic,' But Is Based On Several Factors
The state's economy will be determined by two things this year: more federal relief and the vaccine rollout. That's according to the latest report from the University of Hawaii's Economic Research Organization, or UHERO, forecasting the year ahead.
Local economists say there is still a lot of uncertainty facing the state's economy, but they are expecting a rapid recovery in 2021. The report expects between 20,000 and 25,000 jobs will return this year -- with the possibility of an additional five or six thousand jobs if vaccinations speed up in the state's major domestic and foreign tourism markets.
Carl Bonham, executive director of UHERO, says their baseline forecast is more optimistic than previous outlooks. But he says it is based on a set of assumptions, such as the vaccine rollout and federal relief.
"A big piece of why this forecast is sort of optimistic, and is pointing towards a more rapid improvement in Hawaii's economy, is the federal money," he said. "It's the federal stimulus money that's coming at the right time. And we're also assuming that there's going to be more beyond what's being debated in Congress right now."
UHERO is expecting Congress to introduce and pass a federal infrastructure bill sometime this year. Bonham says the bill will not have an impact this year, but it will boost construction spending sometime in 2022 or 2023.
"And all of those pieces together, along with getting tourism back to something like 2016-2017 levels of activity, really make a big difference in the near-term outlook," said Bonham.
Bonham says while some economic recovery is expected this year, it will still take years for the state to reach pre-pandemic levels.