Preliminary Estimate of the Economic Costs of Hurricane Ida Include $125 Billion in US Output and Could Go Higher
Published on September 02, 2021
On August 29, Hurricane Ida made landfall near New Orleans causing wind damage and flooding. Its remnants have caused significant issues across the eastern United States. The human suffering is of paramount importance and should be the primary concern, as well as enormous emotional losses. In addition, the storm will have a significant impact on the economy.
Based on the modeling system that we have developed over the past 40 years and used to assess numerous natural disasters and current property damage estimates, when multiplier effects and the various positive and negative aspects of the economics of the storm are considered, the net impact of Hurricane Ida could include losses to the US economy (which would be observed over an extended period of time) of $125.3 billion in gross product and about 838,100 job-years of employment. For Louisiana, estimated losses include $84.2 billion in gross product and 563,000 job-years when multiplier effects are considered. (A job-year is equivalent to one person working full-time for one year.)
However, supply chain issues, logistical challenges, and cost escalation associated with the pandemic and its aftermath could push these baseline losses even higher. The Perryman Group estimates that the upper bound on losses to the US economy over the next few years includes $174.0 billion in gross product and 1.16 million job-years of employment, with losses in Louisiana over time of $116.9 billion in gross product and 782,000 job-years.
For more details please refer to the full brief.