HURRICANE IRMA
Hurricane Irma’s wide path to impact
outlook for Florida construction
By Richard Branch, senior economist,
Dodge Data & Analytics
BEDFORD, MA - The one-two
punch of hurricanes Harvey and Irma
have wreaked havoc across the Gulf
Coast in September. Once all the dam-
age is tallied, Harvey is likely to be the
costliest storm to impact the U.S.
Irma’s path through the Keys, then up
the west coast of Florida, took it away
from a direct hit to Miami. And while
the storm itself was as wide as the en-
tire state, the turn to the west likely
lowered the severity of damage in
terms of total dollars.
Estimates from Moody’s Analytics
places the total cost of Irma in the
range of $60-90 billion – a significant
event that will certainly impact the re-
gion’s economy, but still below Har-
vey’s expected destructive toll of
more than $100 billion.
In the initial aftermath of the storm,
more than 60 percent of Florida was
without power. With estimates rang-
ing in weeks for full restoration, many
businesses will be closed resulting in
a short-term loss in income, higher un-
employment insurance claims, and an
overall slowdown in economic output.
The combined impacts of Harvey and
Irma are likely to have a negative ef-
fect on both third and fourth quarter
employment and GDP data.
Irma’s wide path could also pro-
foundly affect construction starts in
Florida, a state that has seen signifi-
cant growth since the recession. In
2011, starts in Florida reached a cycli-
cal low of $22.8 billion. By 2016, total
construction starts in the state
reached $55.1 billion, with broad-
based growth in residential and non-
residential buildings, as well as public
works and utilities.
Prior to Irma, 2017 had been shap-
ing up as another strong year for
starts in Florida. Through the first
seven months of the year, non-resi-
dential building starts had risen 32
percent from the same period of
2016, while public works and utilities
starts were 21 percent higher. Resi-
dential building starts were up a more
modest one percent year-to-date
through July. Based on historical data
through the second quarter of 2017,
Dodge Data & Analytics had predicted
Florida’s total construction starts
would rise nine percent for the full
year to $60.3 billion.
That forecast is now under review
as restoration and repair efforts begin.
Water and sewer facilities, as well as
roads, will be the initial driver of recon-
struction growth in the coming
months. An initial round of federal
disaster relief should be quick to