On several counts, Hawaii’s economy is recovering at a rapid clip: We’re adding jobs, wages are rising and the state’s budget is in good shape, as a new report from the University of Hawaii Economic Research Organization (UHERO), highlights.

However, UHERO cautions, we also face challenges and potential crises. These include rising rates of COVID-19, inflation and war in the Ukraine, with the specter of recession looming.

With this level of unpredictability, it’s imperative that state’s leaders, business owners and individual households reach for resilience, shoring up reserves and advancing healthy, sustainable economic goals.

The solid forecast for Hawaii gives reason for optimism, with caveats.

Visitors from the mainland U.S. have shown unshakeable interest in visiting our islands, pushing tourism revenues close to those of 2019, before the pandemic. Revenues will rise higher throughout 2022 as foreign tourist numbers rise, UHERO predicts, further strengthening the state’s economy.

“Were it not for the anticipated return of international visitors, we would be marking down our forecasts,” UHERO said in a May 12 report.

It’s also important to recognize that the sizable infusion of federal dollars from COVID-relief funding and President Joe Biden’s omnibus infrastructure bill may not pass this way again.

With these realities, it’s reassuring to see that the Legislature has replenished the Rainy Day Fund, aka emergency and budget reserve fund, to the tune of $500 million, and allocated $321 million for the state’s unemployment fund. Other prudent steps, such as restoration of the state’s $5 million disaster fund, also have been taken.

It would be wise for individuals and businesses to take parallel steps. These include budgeting for necessities before splurging on extras, and funding or rebuilding an emergency cushion, if possible.

As a state, the better we do at avoiding high infection rates of COVID-19, the more stable our lives will be. It’s important to continue encouraging booster shots and taking safety precautions.

If things go our way — Hawaii’s tourism patterns continue as expected, COVID hospitalizations drop to negligible levels, and no major jolts undercut the economy — there is good news ahead for job seekers.

Visitor spending is projected to reach $17.4 billion this year, supporting an added 25,700 jobs in 2022, and 21,400 next year, UHERO projects. Higher employment builds higher levels of health insurance and wellness, both welcome.

Even here, though, we see warning flashes. UHERO reports that Hawaii’s pool of available workers shrank during the pandemic, as residents left the state. We continue to face a housing shortage and an extremely high cost of living, both of which can influence working-age residents to leave the islands.

UHERO projects that personal income, adjusted for inflation, is expected to decline 5.1% this year, largely because of the absence of federal aid. Low-income residents will feel this drop disproportionately.

The projection is that income will rebound by 0.9% next year, followed by 1.6% in 2024, but the wage rise won’t be distributed evenly.

Inflation is another stumbling block, though UHERO projects it will ease off to past levels by 2024.

While UHERO projects that Hawaii’s economy will weather these sources of turbulence, risks remain. Let’s do our part by preparing for challenges, individually and collectively.

We can support each other by following safe COVID-19 practices. We also should support local enterprise: Patronizing local businesses and buying Hawaii-made products help support local incomes and keep the wealth in the islands.