(AP) While Florida’s economy will get the biggest jolt from the improbable string of hurricanes this year, consumers around the country may notice the effects in coming weeks and months.
The storms seem likely to impact Americans outside Florida in a variety of ways, most of them subtle, but a few with potentially bigger consequences.
A rebuilding boom could suck construction materials and labor southward, pushing up prices in the rest of the country. While Florida’s insurance market has its own disaster fund, damage elsewhere could cause companies to raise premiums. And Florida’s tourism woes could further harm already teetering airlines, perhaps forcing them to pull out of even more markets.
On the other hand, vacation destinations outside Florida could benefit from skittishness about visiting the state. So could Northern states hoping to stem the flow of people and businesses who have been moving full-time to Florida.
“We’ve already heard anecdotal evidence of industrial recruiting in Florida, and the companies say, ’We’re going to drop you off our list,’” said Mark Soskin, an economist at the University of Central Florida. “Now you’re actually hearing people talking about, ’Maybe this isn’t the best place to live.’ There’s a lot of stress here, you can see it in people’s eyes.”
For most Americans, the most visible effect of the hurricanes has been their contribution to a surge in oil prices, which broke $50 per barrel for the first time at the end of September.
Florida isn’t a major refining center or transportation hub for gasoline, but Hurricane Ivan shut down 39 production platforms and two drilling rigs in the Gulf of Mexico. Approximately 12 million barrels of oil, or 2 percent of annual output there, have been lost since crews were evacuated ahead of that storm earlier this month.
And then there’s the expected rebuilding boom in Florida and along Alabama’s Gulf Cost.
“Plywood, sheathing, already [demand for] a lot of that stuff was pretty stressed,” said Soskin, the UCF economist. “Because of low interest rates, you had a lot of homebuilding, so a lot of those things were in short supply to begin with. This is just going to throw it over the edge.”
Prices for framing lumber are 15 percent higher than a year ago, though prices for it and several other key construction supplies have fallen in recent weeks, according to industry newsletter Random Lengths.
Greg Guest, a spokesman for Georgia-Pacific, which supplies chains like Lowe’s and The Home Depot, said demand from the hurricane areas could cause some localized supply problems, but said the national picture is more balanced because the building season is coming to an end in the rest of the country.
“Supply should not be an issue because of these storms,” he said.
Many Floridians are covered by a state insurance fund set up in the wake of Hurricane Andrew in 1992, and some flood damages will be covered by the federal government, so some experts say premiums may not rise much.
But others believe the storms’ huge bills –– they could exceed Andrew’s tab of $22 billion in current dollars –– will inevitably translate into higher premiums, even in other parts of the country.