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Business

How Natural Disasters Impact The Local Economy

We may have seen just how disastrous natural calamities are over the years but it does not make us immune to its effects and impact on the people, especially to society at large. It is even worse if it is your hometown that is affected and your family is displaced after being evacuated. Well, safety first, after all. Once the storm has passed, it is time to do a quick reality check and assess just how much damage was done and how to move on from such a tragedy.

The local economy is sure to go down during and soon after any disaster strikes. For example, a hurricane with such power and magnitude as Harvey destroyed many homes/properties, businesses, and infrastructures that will require a lot of money in order to rebuild. And because almost everything was destroyed, the price of staple commodities shoots up until enough supply is replenished to meet the people’s demands. Transportation is challenging as most main roads and highways are either flooded or destroyed and therefore not accessible making food deliveries difficult. As a result, prices will likely go up too.

Hurricane Harvey has left tens of billions of dollars in damage.

But how does that steep price tag affect us locally?

Gas prices are already seeing an up-tick, but could the economic impact go beyond that?

The answer to that is yes.

With a natural disaster of this magnitude, the trickle-down effect it has leaves quite a broad reach. Joseph Zoric, an economics professor at Franciscan University, took time Wednesday to break down the financial impact residents locally may see.

A major oil and gas refinery shutting down caused gas prices to spike.

And Zoric says food, and any other transported goods will see a spike as well.

(Via: http://wtov9.com/news/local/what-is-the-local-economic-impact-of-harvey)

Despite the US being a rich nation, it does not necessarily mean recovery will also be swift and that many won’t suffer in the aftermath of a calamity. We’ve experienced it before with Katrina. Losing a home is no joke and people who aren’t used to severe flooding wouldn’t likely have anticipated the dangers brought by the hurricane, thereby made less planning and preparation before its landfall. You can’t simply point fingers after even if there was enough information disseminated by the government and corresponding agencies about what to brace for.

The costs of the deadly storm in Texas and the Gulf of Mexico have continued to mount, with Texas authorities estimating it at $125bn (£97bn).

Hurricane Harvey has killed more than 30 people and destroyed thousands of homes.

While the rain has shifted away from Houston, the US‘s fourth largest city, much remains underwater. The state of Texas is one of the US‘s main economic engines.

Many firms in the region, a major transport hub that is a home to the oil and gas industry, don’t know when they will resume normal operations.

(Via: http://www.bbc.com/news/business-41113666)

Again, experience is the best teacher. The country wasn’t given enough time to process everything and analyze where we have gone wrong because Hurricane Irma came soon after Harvey left. As if the damage brought about by Hurricane Harvey isn’t extensive enough after hitting Texas that is the heart of the oil and gas industry in all of the US, people down in Florida also have to brace for the worst.

Texas is not the only state affected by Harvey but every other state that gets their energy from the different Texas-based oil refineries and suppliers. That alone is a major blow, not only to the local economy in Texas but in other US states because we can expect oil prices to go up in the week and months that follow. And we use oil in running just about any industry there is in the world today. Ordinary citizens will struggle the most because while help is given, they also suffer from the trauma such a disaster has caused them that perhaps only time can heal.

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