Ian’s economic toll in Florida could reach $60 billion to $70 billion

Tropical Storm Ian Could Be Potentially Devastating Impact on major industries of the stateThe economic toll from the storm is expected to reach billions of dollars.

State tourism and hospitality, citrus production. According to experts, and phosphate mining businesses may face week-long disruption in their operations.

The storm, which made landfall in Florida as a Category 4 hurricane before being downgraded to a tropical storm on Wednesday, is estimated to deal an $8 billion blow to the tourism sector alone, representing about 10% of the state’s total tourism revenue. Is. that figure represents a temporary Theme parks and hotels closed At the same time tourism has also decreased. For example, before the storm, Disney announced theme parks will be closed and some of its hotels will be temporarily closed for at least two days.

“With respect to specific industries in Florida, you think about tourism and hospitality and that’s likely to hit two levels,” said Chuck Watson, founder of Enki Research, which uses computer modeling to calculate the impact of natural disasters. use, told CBS Moneywatch. “There is physical damage and disruption from people who cancel travel plans.”

The only silver lining is that this is not the peak tourism season, Watson said.

“It’s the off-season, at least in the middle of summer when people go to Florida and the snowbird season, which hasn’t started yet. It’s lucky from that point of view. They have time to rebuild and recover because you’ve got to enjoy Thanksgiving.” Get more tourism around and Christmas,” he said.

Watson expects between $60 billion and $70 billion in total economic damage related to Ian, which would place it among the most devastating hurricanes ever to hit the U.S. By comparison, Hurricane Irma in 2017 caused $50 billion. Billions in damage, making it the costliest hurricane ever. History of Florida according to Reuters. Katrina, which devastated Louisiana and other states in 2005, was the costliest hurricane in US history, with estimated damage of at least $125 billion.

Ian is expected to regain strength and become a hurricane again on Thursday evening. The storm has left Florida and is expected to hit South Carolina, where a hurricane warning was issued for the entire coast.

“Agriculture, especially orange trees, can take a big hit because we are just before harvest and this is the worst time to have strong winds,” Watson said.

Roughly two-thirds of the state’s orange trees faced hurricane-force winds.

“It’s one thing to lose this year’s crop, but if you damage trees it’s a multi-year problem,” Watson said.

The storm appears to have caused billions of dollars in physical damage to residential and commercial real estate properties. It is not clear how much it will cost to rebuild a damaged or destroyed structure, with long-term expenditures contingent on future economic conditions.

“In the current macroeconomy, things like home prices and construction pricing are really in flux. When trying to figure out the cost of recovery, it’s on the upswing. So you have to take interest rates for reconstruction loans and other variables into account. Gotta keep it up,” Watson said.

Oil and gas production not completed

Oil Producers BP and Chevron Preemptively stalled production On offshore oil platforms in the Gulf of Mexico in anticipation of Ian, but the state’s oil and gas fields were spared.

“The impact should be extremely transient because the storm did not pass through any oil or gas fields,” Watson said. “They did a precautionary shutdown, but in a day or two they will restore flow. I don’t think it will even be a blip on the radar for actual production nationally,” Watson said.

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The bulk of US gas production is located in Texas and Louisiana, while Florida has no refineries, according to Raymond James energy analyst Pavel Molchanov.

“Ian did a lot of damage in the state of Florida, but the oil and gas installations are particularly on the west side of Ian’s path,” Molchanov told CBS Moneywatch. “The storm that severely disrupted the oil and gas industry made landfall in Texas or Louisiana and caused flooding around refineries.”

job losses

For employees in Florida, damaged or destroyed businesses can mean significant job losses.

“When we look at the history of the storm and how the economy was affected, you see a very clear pattern of job losses because businesses close because of the weather or because they have suffered damage from the storm,” said Sean Sneath, National economist and director of the Economic Forecasting Institute of the University of Central Florida.

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On the other hand, employment in the construction industry increases after natural disasters because of the need to rebuild properties.

“However, a bigger myth is that somehow it is good for the economy,” Sneath said. “But you don’t grow your economy by destroying it. All these businesses that got damaged and closed, all these houses that are not habitable, they are not producing any goods and services – they provide no shelter. are not.”

“There will certainly be a flurry of activities to repair and rebuild,” he said. “But in the meantime, those affected businesses aren’t producing anything.”

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