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Hawaii, USA (KITV) – More than 3,000 island businesses remain closed due to the flagging economy.
Hawaii‘s state economist believes it will be years before the negative financial impact of the pandemic fades, though conditions are expected to improve dramatically later this year.
At Waffle and Berry at the Ohana Hale Marketplace, every creation is meant to be a sweet treat — even as the pandemic has dampened business for other owners.
“COVID has been tough on everyone, but I’ve been trying creative ways to keep the business going,” said Cal, who runs Waffle and Berry.
A number of nearby shops and restaurants have temporarily closed, just some of the more than 3,000 island businesses that have closed and have remained closed over the past nine months.
These closures are the reason more than 100,000 residents remain unemployed.
During this pandemic, unemployment rates in Hawaii were double what they were a decade ago – during the Great Recession.
“This is the biggest recession in Hawaiian history,” said State Economist Eugene Tian.
“Many have given up. Some knew it would take a while to recover, so they relocated their businesses. I knew some people who even moved off the island,” said Tess Abalos, owner of Aloha Island & Naturals.
5,500 Hawaii residents have been relocating annually for the past 4 years, but those numbers could be higher in 2020.
For 2021, the state’s unemployment rate is expected to rise about 8 percent, while Hawaii’s growth rate will be much lower: about 2 percent, at least for the first half of the year.
“Once tourism starts, recovery will be rapid. Maybe that will happen in the second half of the year, maybe after the summer,” Tian said.
Cal has already seen a slight increase in customers as more visitors return. He remains hopeful for 2021, as do several other small business owners who are struggling to stay afloat until the economy returns to normal.
“We’re optimistic that the business isn’t dying, it’s moving in a positive direction,” Cal said.
“I will do my best with what I have and not give up. It will take a few years, we all know that,” added Abalos.
According to the state economist, even more than a few years.
“Our forecast: the economy will not return to 2019 levels before 2025,” Tian said.
Not everything is financially negative. Bankruptcies usually spike during a recession, but this time, thanks to stimulus money and protections for residents, bankruptcies have actually come down.
Interest rates are also low, which is good news for homebuyers but bad news for people saving money.
Because of the additional stimulus money, personal income rates have also increased for many Hawaii residents.
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