Hurricane Michael, one the strongest recorded storms to make landfall in the United States, hit the Florida panhandle on Wednesday causing coastal towns to sustain heavy damage due to high winds, rain and flooding.
Steven Kyle, associate professor of applied economics and management at Cornell University, says that while the aftermath of Hurricane Michael can be difficult for families caught in its path, recovery efforts will keep the period of large-scale negative economic effects short.
“In the short run we are likely to see a slight hit to the GDP of less than a percent, probably less than half a percent based on estimates of the effects of Hurricanes Harvey and Irma combined last year and Katrina back in 2005.
“The effects in the immediate vicinity of Hurricane Michael's landfall are catastrophic but emergency crews will rapidly clear roads, allowing reestablishment of basic services such as power and water. Once this happens, reconstruction of buildings and replacement of things like cars will start to add to growth numbers, shortening the period over which any negative effects might be seen. It is certainly true that oil production is affected, but this was also true of the hard-hit Houston area last year and we saw limited effects on other parts of the country and a relatively rapid return to production. However, we will have to wait for further reports to really know the extent of the damage.
“On an individual level for families in the affected region, the aftermath of the hurricane can be extremely difficult given the need for perhaps weeks of temporary housing, and associated costs of displacement from damaged or destroyed neighborhoods.”