The University of Hawaiʻi Economic Research Organization ( UHERO ) on March 30, provided a grim update to its forecast of Hawaiʻi’s economy that includes recent developments associated with the novel coronavirus pandemic.

Since the interim forecast update released on March 10, the COVID-19 disease has spread even more globally, and has exploded nationally with the U.S. leading the world in detected cases. Businesses in many communities have largely shut down, either because of falling demand or stay-at-home regulations. Those rules are now in place in many communities and states, with no clear indication of when it will be safe to lift them.

Hawaiʻi’s economic impact

Hawaiʻi’s tourism industry has been deliberately shut down to try to isolate the islands from additional transmission from outside the state.

According to the UHERO report, “While it is too early to assess the full impact of these dramatic actions on Hawaiʻi’s economy, it is clear that they will be sharp and painful. The clearest indication of this pain is the surge of 80,000 new unemployment claims so far in March. Job counts will fall precipitously in industries tied to tourism and local activities now banned by the stay-at-home order. Other industries will suffer from the general decline in spending.”

By the second quarter, UHERO expects the non-farm job count to fall by more than 140,000 from its recent peak, a roughly 20 percent year-over-year decline.

expects the non-farm job count to fall by more than 140,000 from its recent peak, a roughly 20 percent year-over-year decline. Losses to income will be somewhat less severe, because of enhanced unemployment benefits and the direct payments to U.S. residents included in the recent federal recovery legislation, but they will still be historically large.

Real personal income will fall about 5 percent by the fourth quarter. With a strong start to the year pre-virus and some recovery expected to commence by late spring and early summer, annual figures will show less severe drops.

The job count will average 11 percent lower than 2019 for the year as a whole, and real income will be more than 3 percent lower.

Visitor arrivals for the year will be down an astounding 41 percent.

For a full public summary, go to the UHERO website.