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Hurricane season starts in late summer and drifts into fall in the United States. Sometimes hurricane season comes and goes with potentially devastating storms weakening somewhere in the Atlantic or Caribbean and making landfall as tropical storms or even less powerful weather events. Devastating hurricanes might never make landfall at all, spinning over the ocean but never affecting communities. Sometimes, though, hurricanes gain in strength and follow a trajectory that impacts several cities and areas.
That was the case this past hurricane seasons when Hurricanes Harvey and Irma reminded Americans just how much damage a storm can do. Hurricane Harvey landed in Texas in late August, and then the subsequent storm dumped more than 40 inches of rain across a large area that included Houston — the fourth-largest city in the country. Harvey’s winds plus its resulting rains made it the costliest hurricane in world history, surpassing the record set by 2005’s Hurricane Katrina. Harvey is also the second costliest natural disaster in world history, behind only the 2011 earthquake that struck Japan.
Soon after Hurricane Harvey, Florida very quickly felt the wrath of a natural weather event when Hurricane Irma made landfall in early September. These back-to-back weather events, in addition to wildfires in California, led to an outpouring of volunteer labor and charitable contributions, as well as a mobilization of the U.S. Federal Emergency Management Agency. Both public and private institutions, as well as generous individuals, helped mitigate the short-term crisis. However, these hurricanes will undoubtedly leave a long-term economic imprint, not just on local communities, but on the nation as a whole.
The economic effects of hurricanes are difficult to measure in the moment. We can look back at the economic effects of Hurricane Katrina and similar storms more than a decade after they struck to get a sense of what to expect. Here’s a rundown of the some of the statistics and what to expect in regard to hurricane economic impact.
Many banks and financial institutions will first look at jobless claims when measuring the economic impact of Hurricane Harvey and the economic effects of Hurricane Irma. History shows that many workers found only part-time jobs or no jobs at all after 2005’s Hurricane Katrina, which hit New Orleans, and 2012’s Hurricane Sandy, which ran along the U.S. eastern seaboard and hit New Jersey hardest.
Analysts say the impact is most likely to be felt in hours lost rather than jobs lost. For example, an hourly-wage worker is more likely to see hours slashed from 40 to 20 or less in the wake of a hurricane. When this phenomenon is extrapolated to a larger population, the impact can be felt heavily among retailers, mortgage lenders and others that rely on a thriving job market for success.
The ability of the job market to rebound in areas hit by hurricanes is dependent on the ability of employers to rebound and get their operations back up and running again.
In the wake of Hurricane Harvey, gas prices across the South and Southwest spiked as refineries along the Gulf Coast of Texas shut down. Expert analysts expect these gas prices to spike in the short term after a hurricane dwindles. That said, in areas hit hardest by a hurricane, demand drops long-term during rebuilding, and this long-term drop in demand can place downward pressure on local gas prices.
Hurricane economic impact can have global implications, too, as exports and trade are affected. The Port of Houston is the second busiest in the country, doing nearly 230 million tons in 2013. Oil, gas and chemicals are among the exports that commonly leave from the Port of Houston. The economic impact of Hurricane Harvey and the resulting disruption in Houston’s ability to export oil, gas and chemicals is expected to have a significant impact on GDP growth. Houston exports about 21 percent of the country’s chemicals.
Auto sales have slumped in 2017, and buying power and consumer confidence often tank in the wake of hurricanes. Experts expect this year’s hurricanes to lower car sales by between 100,000 and 200,000 vehicles. That’s a big hit for the economy to take.
It’s not just car sales that are affected. Auto insurers are going to take a big hit, too, as about 500,000 vehicles were completely swamped by hurricane-related floodwaters. The exposure of auto insurers in Texas and Florida is sure to hit the individual companies’ bottom lines, and it could also push stock prices downward, too.
This is the big one. The economic effects of Hurricane Katrina included significant damage to the housing market in 2005, and the economic effects of hurricanes in 2017 are sure to include an impact on housing.
First of all, the housing market grinds to a halt during and after a hurricane. No one is buying or selling a home in the immediate aftermath of a hurricane, and new construction struggles to move forward again afterwards.
Second, the economic effects of Hurricane Irma and Hurricane Harvey will impact the home renovation sector. These devastating events demand more workers in the water-damage restoration and home renovation industries, which can help create much-needed jobs in the wake of tragedy. At the same time, the cost of water damage restoration and home renovation can be costly to individual homeowners and insurance companies.
How Can B-Air® Help?
When you work in the water-damage restoration business, it’s always heartbreaking to walk into a damaged area and to work with home and property owners who have been displaced by a natural disaster. The hurricanes of 2017 are an opportunity for water-damage restoration professionals to be a source of assistance and healing for affected homeowners and business owners. As you get calls from more and more owners who desperately need help, we’re here with the equipment you need to serve them.
After Hurricane Harvey, in partnership with The Home Depot, B-Air sent thousands of pieces of equipment to Texas to assist with restoration efforts.
If you have any questions about equipment and how to secure the right items to serve hurricane-affected homeowners, please feel free to contact us.