Ian’s economic price tag in Florida could be as high as $60 to $70 billion

Hurricane Ian will have a potentially devastating impact on the state’s major industrieswith the economic toll from the storm expected to reach tens of billions of dollars.

Tourism and hospitality of the state, citrus production. and phosphate mining operations are likely to experience outages for weeks, experts say.

The storm, which made landfall in Florida on Wednesday as a Category 4 storm, is expected to cause an $8 billion hit to the tourism sector alone, representing about 10 percent of the state’s total tourism revenue. This figure reflects a provisional Theme park and hotel closures as well as a decrease in tourism. For example, before the storm Disney announced the theme parks will be closed for at least two days and some of its hotels would be temporarily closed.

“In relation to certain industries in Florida, you think about tourism and hospitality, and that’s likely to take two levels of success,” Chuck Watson, founder of Enki Research, which uses computer modeling to calculate the impact of natural disasters. “There’s the physical damage and the disruption from people canceling travel plans.”

The only silver lining is that it’s not peak tourism season, Watson noted.

“At least it’s the off-season between the summer when people go to Florida and the snowbird season, which hasn’t started yet. It’s fortunate in that way. They have time to rebuild and recover because you have more tourism around Day Thanksgiving and Christmas,” he said.

Watson expects total economic losses of between $60 billion and $70 billion associated with Ian, which would rank it among the most destructive storms ever to hit the US. in Florida history, according to Reuters. Katrina, which hit Louisiana and other states in 2005, was the costliest hurricane in US history, with estimated losses of at least $125 billion.

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

“Agriculture, particularly orange trees, could take a big hit as we’re right before harvest and that’s the worst time to get high winds,” Watson said.

About two-thirds of the state’s orange groves experienced hurricane-force winds.

“It’s one thing to lose this year’s crop, but if you destroy the trees, that’s a perennial problem,” Watson said.

The storm also appears to have caused billions of dollars in property damage to residential and commercial properties. It remains unclear how much it will cost to rebuild structures that have been damaged or destroyed, with long-term costs dependent on future economic conditions.

“In the current macro economy, things like home values ​​and construction pricing are really in flux. When you’re trying to figure out recovery costs, that’s forward-looking. So you have to factor in interest rates on refinance loans and other variables .” Watson said.

Oil and gas production intact

Oil producers BP and Chevron proactively stopped 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 over any of the oil or gas fields,” Watson said. “They’ve been doing precautionary shutdowns, but in a few days they’re going to restore flows. I don’t imagine that would even be a blip on the radar in terms of actual production nationwide,” Watson said.


Orlando man walks through flooding from Hurricane Ian

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Most of the U.S. natural gas production is 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 facilities are west of Ian’s path specifically,” Molchanoff told CBS MoneyWatch. “Hurricanes that severely disrupted the oil and gas industry made landfall in Texas or Louisiana and caused flooding around refineries.”

Job losses

For Florida workers, damaged or destroyed businesses could mean significant job losses.

“When we looked at the history of hurricanes and how the economy was affected, you see a pretty clear pattern of job losses as businesses close due to weather or storm damage,” Sean Snaith said. national economist and director of the University of Central Florida’s Institute for Economic Forecasting.


Hurricane Ian downgraded to a tropical storm, but officials say storm threat remains

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On the other hand, after natural disasters, employment in the construction industry tends to increase as properties require rebuilding.

“A big myth, though, is that somehow it’s good for the economy,” Snaith said. “But you don’t grow your economy by destroying. All those businesses that were damaged and closed, all those houses that are unlivable don’t produce goods and services — they don’t provide any shelter.”

“There will definitely be a flurry of activity to repair and rebuild,” he added. “But in the meantime, these affected businesses are producing nothing.”

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