UH economist says fear of COVID-19 will hammer economy until virus is tackled

Coronavirus

HONOLULU (KHON2) — How and when to open the economy with the coronavirus are questions that many states are still struggling with.

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University of Hawaii Economic Research Organization Executive Director Carl Bonham thinks that for Hawaii to successfully reopen, it first has to tackle the virus.

“All of it, the traditional data and the new data, all started showing dramatic declines in activity before there were ever any regulatory changes,” Bonham said about the economic data UHERO has gathered. “Before the bars were closed, you started seeing a reduction in mobility before the shutdown, people started staying home because they were afraid.” He added.

One of the many indicators UHERO uses is Google searches for COVID-19 by Hawaii residents. They found that in April and August when cases of the virus rose, inquiries followed.

“The Google searches for COVID were spiking,” Bonham said.

Towards the end of March, the state saw a significant hit to small business revenue dropping levels to 72% below the year prior. That number was cut by about half in July but again plummeted to about 50% in August before the latest stay at home order.

Restaurants and neighbor islands have been particularly hard hit due mostly to density and reliance on tourism respectively.

“The biggest impact is, is really happening in that accommodations and food sector space. So hotels, anything that’s food service that involves sit down, dining,” Bonham said.

According to UHERO, even though it has far fewer cases than Oahu, Maui County is the state’s economy most harmed by COVID-19. It’s something that Sean Corpuel, the owner of Cool Cat café and Captain Jack’s in Lahaina will battle with through the fall.

“My hope is that if we can get back to something normal by the end of the year, or at least by January, we will be okay,” Corpuel said. “But if this thing, if this is then into next year, then that’s when you have to start looking at those things and going into what decisions have to be made.”

Bonham says there is a way to keep them open.

“The bottom line is that economic success depends on our public health success. And our public health success depends not only on state policy and you know, actions at the Department of Health, but it also depends on all of us. It’s wear a mask, social distance, or physically distance, whatever you want to call it, don’t have big gatherings and big means anything over a couple of people outside.”

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