Economic Impacts of Hurricane Sandy
The Economic Impacts of Hurricane Sandy
Several months after Hurricane Sandy, it is evident that it had widespread effects on New Jersey, based of the fact that lives of people changed in various ways. Besides individual losses, state and local governments equally had a bitter share of these effects, which were described as harsh. Even though there have been efforts to rebuild the affected parts, New Jersey will forever feel the effects of the Hurricane. It is sad to note that thousands of people lost their employment, as businesses were reduced to rubble. Additionally, public facilities like schools and hospitals were destroyed, causing major economic impact. Due to the loss of employment and affected businesses, New Jersey registered a decline in overall taxes. However, the situation is likely to normalize if the process of rebuilding it succeeds.
Firstly, Hurricane Sandy led to capital stock losses, resulting from destroyed infrastructure, businesses, houses and several public amenities. This damage was largely caused by raging wind and floods that wept across towns. In most causes, roads were left impassable as power cables were disconnected, leading massive losses. While priceless property was destroyed, families also lost their loved on
es. Over 400,000 jobs were claimed by November, following the effects of the hurricane (Ro, par. 5). The growth in economy also dropped by 0.7% as economic pillars remained paralyzed.
Furthermore, several economic activities stalled as a result of the devastating hurricane. Prior to the hurricane, the public was warned, leading to the closure of schools, hospitals, and shopping as people dreaded for the tragedy that was being predicted by the meteorological department. New York and New Jersey got disconnected as the transport infrastructure was damaged. New Jersey also recorded a drop in overall sales in October since most of the businesses in the state were closed down. Citizens also earned low incomes because most of the businesses and companies operated for fewer hours. These activities equally affected the national output since of the economic activities in New Jersey had stalled. Close to $10 billion was lost per day after the NYSE was closed down.
As a result of the hurricane, there was increased financial expenditure that was never predicted. The hurricane saw new opportunities emerge especially in the construction industry as there was need to rebuild New Jersey (Walter, par. 5). Due to the high demand of housing for the victims, the sector was boosted and new technology employed. Up to $20 billion was realized as a result of the reconstruction efforts. There was also high demand for insurance of new buildings and businesses against related unforeseen crises. Better restaurants were also constructed, accommodate more tourists as the public felt the pain of consumer spending necessitated by the reconstruction process.
It is clear that Hurricane Sandy had massive negative effects on New Jersey and the nation at large. The local and national economies were affected as businesses and various economic activities remained paralyzed. The closure if the NYSE had severe losses as at least $20 billion was lost in 48 hours. Destruction of public facilities like schools and hospitals also affected the State’s economic activities (Feinberg 51). Reconstruction of the State also had impact, as opportunities in the sector were created. It is worth noting that the rebuilding process also led to improved approaches in housing and also enhanced economic growth. Nonetheless, the financial support from the Federal Emergency Management Agency (FEMA) played a major role.
Feinberg, Stephen J. Perpetuating American Greatness After the Fiscal Cliff: Jump Starting Gdp Growth, Tax Fairness and Improved Government Regulation. Iuniverse Inc, 51, 2013. Print.
Ro, Sam. “Economic Data Confirms Hurricane Sandy Was Worse Than We Thought.” Business Insider (Nov. 18, 2012). Web. 17 April 2013.
Walter, Laura. “Hurricane Sandy’s Impact on Economic Loss and the Construction Industry.” EHS Today (2012). ProQuest. Web. 17 April 2013.