Hurricane Sandy's Effect on the US Economy
Hurricane Sandy is one of the most costly natural disasters in US history. According to Eqecat, it is estimated that the American economy will lose up to $50 billion due to the superstorm. The economy is likely to be affected in a number of ways:
Physical Damage by Hurricane Sandy
Physical damage in households, business premises, and public infrastructure will cost the US financial state up to $30 billion. Several buildings have been destroyed as well as roads, rails, and sewage and water systems. Power outages have also been widespread in impacted areas due to destruction of power lines.
Reduction of business activity
Physical damage to infrastructure has slowed business activities. The food industry, for example, has experienced a snag due to bags of rotting food. The same has been experienced in households that have not been physically damaged by the superstorm but experienced power black outs. Car sales in several cities will be disrupted. Experts have predicted that about 60% of the lost business output will come from New Jersey, New York City and Philadelphia.
To reduce the hurricane's negative impact, Americans are advised to take preventive measures against physical damages. They should ensure that they know their surroundings. For example, they should identify nearby dams and levees that might pose a hazard and move items to safer places. People are also urged to know the elevation level of their property in order to keep items at risk of damage in safe places.
According to Mark Zaindi, a leading economist at Moody’s Analytics, the outcome of the hurricane on the US economy is likely to rise higher than the initial estimate once the actual damages and repair costs are accurately documented. The economist adds that the time taken for the economy to revive depends on when power is restored since businesses cannot operate without it. He concludes by saying that if power takes longer to resume normal services, then the economic consequence will be more costly.
As terrible as superstorm Sandy seems to be, economists say that the economical effects will not be as bad as what was experienced during Katrina.
Those affected by the hurricane should not be discouraged because as much as it will incur high rebuilding costs, it will have minimal long-term effects on the economy. With time, the economy will be back up and hopefully, better than before the superstorm.