Irene damage could be many billions

2011-08-28 21:17
New York - Hurricane Irene is expected to inflict tens of billions of dollars in damage before it concludes a three-day sweep that has left a trail of havoc from Atlantic beach resorts to Manhattan high rises, officials and others said on Sunday.

Assessments were just starting to come in, but as the massive storm moved into New England it was already clear that it had caused widespread flooding and structural damage across a vast swath of the US eastern seaboard.

"I've got to imagine the damage estimates will be in the billions of dollars if not the tens of billions of dollars," said Governor Chris Christie of New Jersey, whose famed "Jersey shore" was shut down as hundreds of thousands of people fled the state's long, vulnerable coastline.

Irene weakened to tropical storm status on Sunday as it crashed into New York City, the National Hurricane Centre said, but the still powerful storm was flooding parts of lower Manhattan.

Experts said the financial toll would be much higher if, as transpired, there was a direct hit on New York, the US financial capital and largest city with nearly 19 million people living in its metropolitan area.

Economist Peter Morici put the immediate casualty losses from the storm at $40bn, including the loss of two days of economic activity.

But Morici, a professor at the University of Maryland, said the impact would diminish significantly over the longer term as reconstruction spending kicks in, injecting fresh spending in recession-weakened regional economies.

"Rebuilding after Irene, especially in an economy with high unemployment and underused resources in the construction and building materials industries, will unleash at least $20bn in new direct private spending, possibly more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive," he said.

Weekend

Another silver lining is that the storm made landfall over a weekend, mitigating the economic impact in coastal cities although dealing a direct hit to the tourist industry at the peak of the summer beach season.

Kinetic Analysis, a company that does computer modelling of predicted storm damage, predicted Friday that Irene would cause $5-10bn in damages, based on the latest available weather data.

Losses could include damage to flooded buildings; business interruptions and clean-up costs picked by the government, said Chuck Watson, the company's director of research and development.

Reporting on Sunday, the company said losses in North and South Carolina, the first states hit as Irene made landfall on Friday, are expected to range between $200m and $400m.

The costliest hurricane in US history was Katrina, which flooded New Orleans in 2005 and is estimated to have caused more than $133bn in losses.

Irene was the 10th major weather-related disaster in the United States this year, making 2011 a record year, according to a study by the National Climactic Data Centre of such events going back to 1980.

Major floods, drought, tornadoes and a blizzard had already inflicted more than $35bn in damage this year, said the study, which was posted on the website of the National Oceanographic and Atmospheric Administration said.

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