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Blackout 'bill' $30bn a day
17/08/2003 21:31 - (SA)
Washington - The bill to the US economy for the largest power outages in the country's history could run up to $30bn a day, economists estimated on Friday.
Car assembly lines remain idle and utility plants remained off line on Friday, one day after a massive power failure struck large swaths of the eastern US and Canada.
"Maximum impact under this scenario, in our view, is approximately $25bn to $30bn a day in terms of lost gross domestic product," said Merrill Lynch chief US economist David Rosenburg.
Economists said, however, that the long-term damage to the economy should not be too crippling.
Although many businesses told employees not to report for work on Friday in the affected areas, the New York Stock Exchange - in a show of confidence - opened for business as usual, and the treasury department had received no reports of disruption to the banking system.
"The bottom line, in our view, is that when a quarter of the country is shut down, which we are practically at risk of doing, it basically shaves off roughly one percent from gross domestic product growth at an annual rate," Rosenburg said.
Merrill Lynch said that, as a result, US third-quarter growth could now moderate to 3%. Emergency plans
Emergency plans put in place for the feared millennium computer glitch and following the September 11, 2001 attacks are expected to help speed the mighty US economy back into its pre-outage gear.
"To be sure, there are some costs - people lost food, ice cream, and then some information was probably lost, and today New York City's not really working, some output has been lost - but I think most of it can be made up," said Sung Won Sohn, chief economist at Wells Fargo Banks in Minneapolis.
The biggest impact was expected to be on the nation's industrial production.
Many of Detroit's car plants were idling as utilities scramble to restore power on Friday, internet access was also down in many offices and many trains and subways in New York were not running. Economic statistics
"The blackout will eventually affect many US economic statistics, including industrial production, retail sales (and) manufacturing output," said Dana Saporta, an economist at Stone and McCarthy in New Jersey.
On the New York Stock Exchange, which processes more than 1.3 billion share deals on an average day, trading was light and volatile.
- AFP
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