The novel coronavirus crisis hit Hawaii with devastating effect. The abrupt economic shut-down, while successful in limiting the virus’s spread, has produced by far our sharpest and deepest economic contraction. But reopening has now commenced. The question is what that reopening will look like, how long it will take, and what the legacy of COVID-19 will be for the Hawaii economy.
7 thoughts on “UHERO Forecast with Scenario Analysis: Battered by COVID-19, Hawaii begins to reopen”
If the economic outlook prophesied in Battered by COVID-19 were to be quantified in terms of bankruptcies, reductions in tax collections, effect on the Hawaii Employees’ Retirement System, population losses, real estate prices, and other such key indicators, we might see a marked change in state policies restraining tourism.
At the COR meeting, there was an attempt to do just that. We are also looking at whether we can reasonably predict the wave of coming bankruptcies. The public summary does not include our population forecast. In the baseline scenario, we anticipate a decline in population of over 20K people between 2020 and 2022, roughly 3.5 x the decline we saw from 2018-2020. In the pessimistic scenario, the decline is 34K.
If every political leader with authority to shut down the economy had from the very beginning lost their own paychecks until everything was allowed to reopen -without any catch up payments afterwards: actually lost their pay just as everyone else did- the shutdown might have been a lot different.
It would be nice to see more analysis of the tourism estimates. The pessimistic outlook may well be optimistic if the consensus of US epidemiologists concerning the continued prevalence of the virus through the rest of the year, if not an actual resurgence. Yes, Hawaii did relatively well after 911, but there was little actual risk. Independently of the “reopening” of Hawaii’s tourism sector, one wonders how many people will actually travel to a place where they might become isolated if there is a spike?
Thanks for the comments Sam. A detailed description of the assumptions that went in to the scenarios is provided in our blog post at https://uhero.hawaii.edu/covid-19-developing-economic-recovery-scenarios-for-hawaii/
Note that we were not using 911 as a guide in any sense when developing the assumptions, and clearly it is possible to come up with much more pessimistic scenarios involving a second wave…. And we are in complete agreement, that what will matter most is travelers willingness to travel.
We need to put a PAUSE on the runaway Honolulu Rail project at Middle Street. We cannot continue to throw good money into a project that started in 2006 at $2.7 Billion and it’s now at $9.3 Billion and climbing. It’s insane to keep burdening our residents with this antiquated project that is slated to only provide approximately 2% traffic de-congestion.
Our economy is beaten up badly, businesses are hurting badly, some will not open up again, families have lost employment and so on. It’s time to stop this bleeding. It will help relieve the rail tax burdens on our residents a little as we try to get back on our feet.
Do you happen to have any forecasts for the labor force participation rate?