Over the weekend Hurricane Harvey landed in South Texas and began a cycle of major flooding that overwhelmed residents and emergency services. With thousands of people remaining in Houston and its surrounding communities during the storm, first responders spent a lot of time bravely searching for victims and pulling them out of the water. Media outlets then broadcast some of these stories to a shocked American public, leading to an outpouring of support and donations. (Click here for information on how to donate to the Hurricane Harvey relief effort.)
Of course, finding and helping those who were displaced by the storm will be the top priority for some time. Once the water finally clears, though, cities like Houston will tally how much damage the storm did in monetary terms. According to one estimate, Harvey could end up costing the economy $30 billion thanks to the extensive rain that followed the worst of the storm. “If Harvey were just a hurricane, it would have only caused $4 or $5 billion worth of damage,” said Chuck Watson, an expert on the economic impact of natural disasters for Enki Holdings. “As a tropical storm phase, it’s actually producing five times that much damage.”
As a result, hundreds of businesses have been forced to halt operations until the flooding gets under control. “You’ve got the fifth-largest economy in the United States basically sitting at a dead stop for three or four days,” said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston. Many of these idling companies are tied to the oil and gas industry, which accounts for about a third of Houston’s overall economy. Although most refineries have not reported significant damage, that fact could change as they sit in water for days and days. If this happens, experts fear that not enough companies will know how to repair their rusty equipment, leading to a situation that could affect the entire country. “Then you’re talking about gasoline shortages and longer term price hikes, and that’s going to have a ripple effect through the whole economy,” said Watson.
- Why will the economic impact of Hurricane Harvey be far worse than other storms that have hit South Texas?
- Besides inflicting property damage, how do major storms like Hurricane Harvey hurt the economy?