Hurricanes May Dent US Economic Growth for a Few Months, Analysts Say

The combined damage from Hurricanes Irma and Harvey could cut U.S. economic growth by one-third for a few months, according to business analytics firm IHS Markit.

Bankrate.com’s Mark Hamrick said, however, that analysts wouldn’t know for sure until Irma passed. He said Harvey alone might cut growth by half of a percent in the third quarter.

As far as the impact from Irma, “No doubt it is a substantial negative,” said Hamrick.   

Florida accounts for about 5 percent of the the U.S. gross domestic product and 6 percent of U.S. jobs. PNC Bank Chief Economist Gus Faucher said U.S. economic growth might briefly slow in the third quarter because of Harvey and Irma, but that he thought it would bounce back late this year and early next year.

“Obviously, there is destruction in the near term, there are people who lose their jobs in the near term, but then there’s a lot of activity following that, so we have more jobs as reconstruction funds flow in from insurance payments and federal aid. So there’s a lot of rebuilding to expect,” said Faucher.

Jim Baird of the Plante Moran financial firm told VOA that storm damage to the national economy could be significant but temporary. He said post-storm rebuilding with more modern facilities might increase productivity, which could reduce the “sting” of economic loss a bit.

Commonwealth Financial Network’s Brad McMillan said previous major stiorms like Hurricanes Katrina and Sandy caused huge local problems, though they did not change the national economy in a “fundamental” way. He noted that the recovery in this case might take “longer than usual.”

Real estate experts said Hurricane Irma’s winds threatened 8.5 million homes and businesses in Florida. The data analysis firm CoreLogic said storm surges — floodwaters driven by high winds and low pressure — also might endanger 3.5 million commercial and residential buildings.

Standard & Poor’s analysts said they were still adding up the costs of Hurricane Harvey, but that Irma seemed likely to cost even more. Researchers at Barclays Bank said hurricane claims costs might rise high enough to wipe out a year of earnings for certain insurance companies.  

Hurricane Irma also is hurting airlines, which have canceled 4,600 flights to and from airports in the Caribbean and Florida, according to FlightAware.com. Bad weather was forcing Miami to stop operating Friday and Orlando to end flights on Saturday. Together, these major airports handle about 2,000 flights on normal days.

Online Hotel adviser Kelsey Blodget said airport closures would hurt the tourism and hospitality trades.

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