Most sectors of Hawaii’s economy are starting to grow again but it will take years to recover the tens of thousands of jobs that were wiped out during the recession.

The number of wage and salary jobs statewide has fallen by about 40,000, or about 6 percent, since the recession started in late 2007. Businesses small and large slashed jobs to cut costs as the economic crisis deepened.

"We’ve seen a huge drop in jobs. The number of people who were put out of work by the recession is much bigger than many people had expected," said Byron Gangnes, an economist with the University of Hawaii Economic Research Organization.

The impact has been more severe on the neighbor islands where job losses have totaled roughly 10 percent to 11 percent through the past three years, said Gangnes, who co-authored a UHERO report released today on the outlook for Hawaii’s economy.

The closing of sugar producer Gay & Robinson Inc. on Kauai in 2008 and the pineapple operations of Maui Land & Pineapple—two of the larger private-sector employers on those islands last year—resulted in hundreds of layoffs. On Oahu, mass layoffs in 2008 included 1,900 positions at Aloha Airlines when the carrier shut its doors and 1,000 jobs at NCL America when it pulled its second cruise ship out of service. Most recently, more than 400 employees at the Honolulu Star-Bulletin and Honolulu Advertiser lost their jobs when the former bought the latter and consolidated the two papers.

After peaking at 631,400 in 2007, the number of wage and salary jobs in the state has fallen steadily and is expected to bottom out at 592,200 this year, according to data from the state Department of Business, Economic Development and Tourism. A complete recovery in the job market isn’t even on the radar screen yet. The department, which only makes projections three years out, expects wage and salary jobs to total 609,400 in 2013, still well below the 2007 peak.

As in past downturns, improvement in the job market lags behind the overall economic recovery. Hawaii’s economy has begun to stabilize in the past six months according to the UHERO report.

"Recovery will take hold across Hawaii’s four counties during 2010," the report said. "Visitor numbers have stabilized and will gradually improve as growth strengthens in major tourism markets."

However, the steep drop in jobs during the recession means the 2010 numbers are "starting off in a very deep hole. As a result, annual figures for this year will still show a small decline in many industries, even though some hiring will occur as the year progresses," according to the report.

What makes the recovery particularly difficult is the fact that many companies that had mass layoffs are no longer in business, said Lawrence "Bill" Boyd, who serves on the faculty for the Center for Labor Education and Research at the University of Hawaii-West O’ahu.

"You would have to have exceptionally high levels of job creation—almost at levels never seen before—to get back to where we were before the recession anytime soon," Boyd said.

Nonetheless, there are signs of improvement in the job market, including a decline in the unemployment rate and in the number of people filing unemployment insurance claims.

The statewide 6.7 percent unemployment rate recorded in April was the lowest since March 2009. And the first-time claims for unemployment insurance benefits averaged about 2,200 per week through the past month, down from an average of 2,600 a week in 2009.

Still, many who were laid off are having difficulty finding work.

Chev Rapozo, 32, said he has been unable to find a permanent job since February when he was cut from a construction company where he had worked for seven years.

"We were doing well at the start of the year, then my job fell through. Five of us lost our jobs and we were all in the same boat," Rapozo said yesterday while waiting in line with about 30 others to file for unemployment benefits.

Trudy Young, 47, lost her job as a patient services representative at a radiology firm in April when the company downsized. She said she filed for unemployment benefits the day after she was cut, but has not yet received a payment. Young said she came to the unemployment office in person because she wasn’t getting results over the phone.

Nathan Williams, 38, was one of 12 Pearl Harbor shipworkers laid off last week by defense contractor BAE Systems Inc.

"I just started with the company in January, so I was third from the bottom. This is the first time I’ve ever had to file for unemployment."

As the economy recovers, some companies are ramping up hiring.

"There are jobs being added in many industries," said Gangnes of UHERO. "But because we started at such low levels hides the fact that there is some net hiring this year."

Scott Williams, president of Lex Brodie’s Tire Co., said the company has added several mechanics at its five Oahu locations as a part of its introduction of a new maintenance package called the "Active Family Annual Service Package."

"Our employee count has remained pretty constant over the past few years. But now we’re hiring as part of this expansion."

Williams said demand for auto repair work picked up during the economic slowdown with many owners keeping their cars longer than when the economy was more robust.