What Could Be Hurricane Ian’s Economic Impact
Approximately 1 million properties in Florida’s west coast, including Naples and Punta Gorda, could sustain significant damage caused by Hurricane Ian, totaling $258 billion in replacement costs, according to a recent analysis.
Florida as a whole has a major economic impact on the United States. The Sunshine State has the fourth-highest nominal GDP in the nation, larger than all but 15 nations, and would rank after Mexico and before Indonesia if it were a sovereign state.
Jim Long, finance professor at Friends University in Witchita, Kansas says the effects of Hurricane Ian will slow down the supply chain for Florida’s top exports, which include aircraft engines, engine parts, cell phones, and integrated circuits (processors/controllers) for at least nine weeks.
“[Supply chain disruptions] are almost like being in a traffic jam”, the professor said. “You sit for a certain amount of time — in this case, nine weeks — and cars start moving; you don’t start moving, it depends on how far back you are in the chain.”
Hurricane Ida, a Category 4 storm, made landfall in Louisiana in 2021 and set a new record for intensity and damage, trailing only Hurricane Katrina in 2005.
Ida caused $75 billion in losses, and the money to reconstruct infrastructure and aid displaced families in repairing their homes came from federal relief programs and nonprofit organizations.
In addition to the state’s many closed fuel terminals, heavy winds and flooding prevent truck delivery in many locations.
Distributors of fuel in the state have issued a warning about the protracted wait periods for resupplying homes and businesses with diesel for generators. Ninety percent of the fuel in the state is delivered to four ports on barges, therefore a protracted disruption in maritime transportation could jeopardize the supply, according to an economic threat analysis.
In 2017, Hurricane Irma slammed Florida’s southwest coast, where Ian landed.
Phosphogypsum, a radioactive byproduct created during the production of phosphate fertilizer, leaked into Florida’s Lake Okeechobee as a result of the storm, and it then flowed back into the Gulf of Mexico.
Algae blooms are caused by phosphogypsum and its toxicity. When the blooms die, red tide results, which tragically kills marine life.
As red tide has moved in, a owner said: “I have no way of knowing if this is going to last two weeks or four more months.”
She said. “This may shut us down permanently.”
According to the National Center for Coastal Ocean Science, the red tide event’s projected total economic impact (including direct, indirect, and induced consequences) was $318 million due to the disruption of the Airbnb market.
2,876 jobs were lost throughout the entire state.
Produced in association with Benzinga.