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economic impacts of Hurricane Sandy

Hurricane Sandy’s Impact on Economic Loss and the Construction Industry

An economist at Mississippi State University who estimated an immediate economic loss from Hurricane Sandy to be about $20 billion dollars in property damage – or $60 billion when considering lost work time, lost tax revenue on wages, a loss of spending effect and loss of commerce during business closures – added that the rebuilding efforts could give a boost to the construction industry.

Hurricane Sandy, Frankenstorm, Superstorm Sandy – whatever you call it, this massive storm, which battered New York, New Jersey, Maryland, Delaware, Virginia, West Virginia, Pennsylvania and other states at the end of October, may have far-reaching economic impacts for the country.

“When you consider how many people we are talking about in New York City alone, the impacts are huge. The economies of these heavily populated areas will essentially come to a grinding halt while we wait for the storm to pass,” said Mike Highfield, associate professor of finance and head of Mississippi State University’s Department of Finance and Economics.

Oct. 29 and 30, for example, marked the first unscheduled closure of the stock market since the 9/11 terrorist attacks. Such closures often are "very costly," Highfield said.

But the storm might also spell some opportunity for the construction industry.

“After Sandy passes through, there will be opportunity for the construction industry and additional private spending. There will be initial devastation, but people will end up coming back and reinvesting,” he added.

Furthermore, Highfield said, the losses from Hurricane Sandy could be amplified because residents in the Northeast are not as experienced in weathering hurricanes as those in the Gulf Coast area.

“In the short run, it can be very painful,” he said of the storm’s economic impact. “In the long run, it may be somewhat of an economic shot, but it will take several, several months. In the meantime, there is a lot of agony and sadness from a human point of view.”

TAGS: Construction
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