The long term economic impact from hurricanes Harvey and Irma could be significant.
That’s the figure for total damage to the US economy, including Harvey’s $100bn.
That makes 2005’s Katrina look small and accounts for unemployment, lost infrastructure and property damage. If correct, it’ll neuter any economic growth the US is expecting for the rest of 2017.
Irma hit Florida, endangering a major orange juice producer: we’ve already seen a surge in frozen orange concentrate prices. And orange trees take a long time to grow.
Irma could cost the insurance industry $50bn in the US.
Insurance firm shares have plummeted as a result.
But Florida’s insurance market in particular could be in trouble: it’s dominated by lots of small operators; many of the bigger players left the state in the early 2000s. So we could see consolidations of struggling outfits there.
Then there’s the estimated 80% of homeowners in Texas who aren’t covered. Their only recourse is government, which could take weeks and offers only minimal payouts.
Oil demand will weaken. This is due to refinery shutdowns and mass evacuations.
Construction should see growth: repairing Florida’s electrical grid and homes will boost jobs and activity in the sector. Meanwhile, the New York Fed thinks the economy is going to bounce back stronger.