November 02, 2012
Cleanup From US Storm Could Benefit Local Economies
States in the U.S. Eastern seaboard are digging themselves out from one of the costliest storms in recent memory. Damage estimates from Hurricane Sandy vary greatly, but some suggest the long-term impact of the storm could negate the immediate economic damage.
On the ground, the damage from Superstorm Sandy is obvious. But from the air, the destruction is stunning. At this community in New Jersey, boats lie scattered amid broken piers, flooded roads remain impassable, and hundreds of businesses are still closed.
For homeowners in Sandy's path, it's heartbreaking.
Preliminary estimates put the total cost of the storm for the East Coast at between $20 and $50 billion. But each day businesses remain closed reduces the region's economic output by about $200 million a day.
In New York's Chinatown, many stores are still without power, but store owner Cyndi Cheung says foot traffic is already coming back.
'Yeah, we didn't open yesterday and we closed early on the day of the incident, so yeah, we totally lost at least two days business," she noted. "So I'm trying to get back on. At least we could do some business today."
For some workers, no customers means no paycheck.
In the short term, some economists say the storm could hurt employment and reduce gross domestic output slightly. But Robert Johnson at Morningstar Analytics in Chicago says in the months to come the storm could bolster the U.S. economy.
"My guess is it may throw a couple of economic statistics like retail sales for a couple of weeks or whatever, but, on the other hand, I think it's probably the reverse - it's more like a stimulus program," he said.
Johnson says the damage could have been much worse.
"To give you some perspective, Katrina was more like a $100 billion impact because the winds were so much stronger. This is a more populated area, but the winds were less -- you need to completely wipe out hundreds of thousands of houses like you did in the Katrina situation," he explained.
Although the comparison will do little to ease the losses some have suffered, Johnson says in a $15 trillion a year economy, and a region that generates about $10 billion a day in retail sales, Sandy could eventually boost economic activity in affected areas as clean up and rebuilding efforts intensify.