Economists at the University of Hawaii are forecasting a turnaround in the new year, although only modest to begin with.
UHERO, the UH Economic Research Organization, now estimates that, even after one of the worst years in the history of island business, overall personal real income will drop a mere 0.2 percent. However, that number is influenced heavily by increases in military pay, concentrated on Oahu.
Both visitor and arrival data and hotel occupancy rates, while down, appear to signal that Hawaii is "very likely past the bottom of the tourism downturn," the economists say in their quarterly report.
UHERO has raised its expectations of visitor growth slightly from the previous Quarterly Hawaii Forecast Update, to 3.7 percent growth in 2010.
Again, the pulse is going to show up more on Oahu, because a strong yen and recovery in Japan should boost Japanese tourism, heavily skewed to Waikiki.
Arrivals from the Mainland, where Maui's visitor industry prospers or swoons, are projected to be up 3 percent in 2010 and 3 percent in 2011. That would not bring the totals close to 2007 levels.
"Lingering high unemployment levels and damaged household balance sheets" will deter American tourists through at least 2012, the economists said.
Job losses have been somewhat higher than UHERO had forecast, but the unemployment rate has not followed in tandem, presumably because people have quit looking for work, at least at home. Only weak job growth is likely ahead.
Two areas of employment are not expected to take part in renewed expansion: construction and government. UHERO says construction job losses will stop by late next year but not expand until 2012.
Government job losses are significant and will continue because of the "horrendous budget picture," the economists said.
The state has chopped more than 600 jobs - equivalent to closing a large resort - and cut back the hours of many thousands more.
County employment rolls have not been touched, but falling real property values leading to reduced real property tax collections are expected to put pressure on county councils in next year's budget deliberations.
The boost in military pay obscures the pain being felt in the civilian sector. UHERO says that total private sector labor and proprietor income is expected to drop 5.4 percent this year.
"Risks abound," concludes UHERO, including the possibility that the apparent recovery worldwide could come to a halt.
* Harry Eagar can be reached at email@example.com.