As the cleanup and repowering winds down for storm Sandy, we will look at the economic effects in some detail. The CliffsNotes version: A significant economic event, but not huge. And not a big mover of the gross domestic product up or down, as there were winners and losers, but the overall picture is roughly a wash.
That’s the way almost all weather events shake out, as the immediate hit to output and the loss of property are later offset by the massive effort to rebuild and clean up. Hotel, restaurants and tree services gain, along with linemen and construction workers, of course.
Electric ratepayers, taxpayers, insurance companies and people with uninsured losses are the economic losers, but the insurance companies, flush with cash from a few good seasons of catastrophe claims, are well positioned to handle a payout estimated to be $20 billion.
The overall cost of the storm could be easily double that amount or more. And now the haggling is happening: How do you value, for example, two lost days at the New York Stock Exchange?
In the big picture of the U.S. economy, or the economy of Connecticut, economist Don Klepper-Smith of DataCore Partners in New Haven said, “it’s not going to move the needle much one way or the other.” Maybe one or two tenths of a percentage point up. For construction workers and others who’ve been on the sidelines of a weak recover, “this has the potential to be a godsend.”
It’s a slight gain to the GDP, economists say, partly because the economy measures the effort it takes to, say, clean up a fallen tree, but it has no way to measure the loss of the tree.
“On the emotional needle, if you live in Staten Island, you’ve been through hell and back,” Klepper-Smith said. “Being originally from New York, I can tell you that this has been a cataclysmic event.