The health of Hawaii’s economy has been hooked up to a new gauge displaying weekly levels of improvement or decline amid often fast-changing coronavirus impacts.
University of Hawaii researchers recently unveiled what they describe as the most frequent assessment of the local economy’s “pulse” in an effort to help government leaders and others be more attuned to what COVID-19 and virus mitigation measures are doing to the financial health of people and organizations in the state.
This heartbeat of Hawaii’s economy is compiled from 18 sets of data that include counts of open businesses, payroll processing volume, unemployment benefit claims, airplane passenger arrivals and how much time people spend at different locations such as home, stores and on the road.
Peter Fuleky, research economist with the University of Hawaii Economic Research Organization leading the project, said the weekly updates to the data set represent the novelty in the pulse readout compared with traditional longer-term, often quarterly, assessments of the economy.
“You want information where you are right now,” he explained. “Making good business and public policy decisions in such a rapidly changing environment requires data that is as timely as possible.”
The UHERO Economic Pulse readouts are represented as a percentage of how much the local economy has recovered since it hit a trough in April after a decline began in March when initial travel quarantines were imposed and nonessential businesses were forced to close.
As restrictive measures were eased, a gradual recovery to Hawaii’s economy began in May, and by late June through the middle of July, the state had regained about 35% of economic activity that had been lost since the April low point, according to UHERO’s gauge.
Fuleky said this rebound was fueled in part by many businesses reopening and federal aid that included direct payments to households, extra unemployment benefits, money for state and county governments and $2.5 billion in forgivable Paycheck Protection Program loans received by about 25,000 businesses in the state.
However, in the wake of spiking COVID-19 cases that triggered a second round of business restrictions and a partial interisland travel quarantine, economic activity has backslid to where the recovery as of Sept. 5 was only 19% of what was lost since the April low, UHERO’s latest pulse readout said.
“So we’ve lost roughly half of our recovery since the end of June,” Carl Bonham, UHERO’s executive director, told the state House Select Committee on COVID-19 Economic and Financial Preparedness in a presentation Monday.
UHERO’s pulse readout is a broad measure aimed at summarizing total economic activity statewide using a combination of traditional and unconventional measures.
For instance, one data set tallying Google searches in Hawaii for “COVID” is used to reflect cautiousness or fear of the virus. So if this search count goes down, it suggests there will be a positive effect on the economy. Inversely, people spending more time at home as gleaned from Google mobility data suggests a negative effect on the economy.
Some data sets are given more weight than others, but overall they produce an index value aimed at reflecting the pulse of the local economy.
“The important thing is to keep the virus under control so we can reopen more fully and eventually bring back tourism and turn this new index around,” Bonham said.