General Question

elbanditoroso's avatar

Are hurricanes good for the economy?

Asked by elbanditoroso (26976points) September 10th, 2018

Assuming damage to North Carolina and neighboring states, it would seem that a bad hurricane is good for the economy:

- Home Depot, Lowes, etc. will sell lots of lumber (and other things) for repair and rebuilding

- Suppliers to Home Depot, Lowes, etc., will be selling more material wholesale, which means added traffic and profit

- Utility workers will be working overtime to get electricity and water back on

- Skilled construction workers will have more work than they can handle

- Motels and restaurants will be full, with people there at the affected areas to do repairs and construction

- Amazon and other retailers will sell a lot of replacement <stuff>

- Undertakers will have an upswing in traffic from people who die in hurricanes

- Auto dealers will sell replacement vehicles for those that are waterlogged and have to be written off.

And so on.

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7 Answers

JLeslie's avatar

It definitely causes some spending. The local economy gets a boost in some ways, but if there is a lot of damage to the area, there is a stoppage in spending, income, and taxes for a while in the area.

For some people it makes them rich, but that’s an individual thing. Some people lose almost everything.

LuckyGuy's avatar

I think there is a net-zero effect. All the spending just brings you up to where you were. It transfers money from insurance companies to suppliers of parts and labor.

If hurricane damage really benefited the country we should send bombers to drop their loads over older neighborhoods to encourage updating and investing in new infrastructure.
Obviously we don’t do that.

One thing this does do is get people and service personnel thinking about how to prepare for a disaster. That is always good.

LostInParadise's avatar

If unemployment were high then hurricanes could be a boost for the economy. There are those who say that WW II was very helpful in getting us out of the Depression. The unemployment rate is in fact very low, The biggest economic problem is that middle class wages have been stagnant when adjusted for inflation. I don’t see that the types of jobs added for hurricane relief are going to help that situation.

Zaku's avatar

There is no such thing as “the economy” that can objectively measured such that you say a hurricane is good or bad for it, without introducing subjective meaning to your definition.

ragingloli's avatar

Broken Window Fallacy.

stanleybmanly's avatar

There is no question that rebuilding and disaster relief stimulate the economy, but the losses from disruptions of normal business are incalculable. And my guess is that the hit to the invisible people at the bottom is difficult to tabulate.

Tropical_Willie's avatar

Not for people that are under insured for loss and maybe have no flood insurance. Total loss !

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