HURRICANE IRMA
HURRICANE IRMA RECOVERY:
Will $100 billion in business flow to Florida’s
construction industry in the next 18 months?
Florida Construction News staff writer
The devastation from Hurricane
Irma has touched the heart and soul
of Florida’s communities – setting in-
credible challenges for the state’s
construction industry both in immedi-
ate crisis management and longer-
term recovery.
There are stories of heroism, com-
munity spirit, and adapting to situa-
tions that would be unfathomable if
you weren’t actually living through
them. There also will be opportunities
because much of the billions of dol-
8 – FALL 2017 — Florida Construction News
lars to rebuild the state’s homes, busi-
nesses, and infrastructure will flow to
the architectural, engineering and con-
struction businesses throughout the
state. Florida Construction News invited
readers to tell their own survival/expe-
rience stories, and these are detailed
in a separate article.
It is early going, and the data is
rough, but some indications are that
the construction industry may see an
unprecedented business boom in
through the next year.
“We believe the damage estimate
from Irma to be about $100 billion,
among the costliest hurricanes of all
time,” Accuweather president Joel
Myers said in a statement. “This
amounts to 0.5 of a percentage point
of the GDP of $19 trillion.”
Taking another comparison into ac-
count – statewide building permit data
– you can see the implication of the
storm on Florida’s contractors and
suppliers. The US Census Bureau reports that
there were $25.86 billion in permits is-
sued statewide in 2016.
If Ac-
cuweather’s Myers is correct, this
HURRICANE IRMA
means the few days from the storm
created the equivalent of four years of
work for the industry. (Of course, not
all of the damage costs relate specifi-
cally to the construction industry but
undoubtedly a very large percentage
of the overall recovery costs relate to
building and infrastructure require-
ments.) Combined with Hurricane Harvey’s
damage in Texas, there likely will be
shortages, pricing pressures and
stresses on supply chains, as well as
significant construction labor short-
ages, which will ripple out of the af-
fected areas through the rest of the
nation. The two hurricanes caused be-
tween $150 and $200 billion in dam-
age to Florida and Texas, comparable
to Hurricane Katrina’s costs in New
Orleans in 2015, Moody’s Analytics
says in a preliminary estimate.
Moody’s chief economist Mark
Zandi says rebuilding from the back to
back storms will boost the U.S. econ-
omy in the fourth quarter and into
2018. “While at this point it’s hard to
know how much (damage there is) the
storms seem likely to have caused
$150 billion to $200 billion in total
damage to homes and furnishings, ve-
hicles, commercial real estate and
public infrastructure,” Zandi says in
his analysis. “This is comparable to
the property loss resulting from Hurri-
cane Katrina.”
A critical factor in determining the
disasters’ effects on the economy is
“how much insurance money and
government aid flows to the impacted
reasons, and how quickly these funds
get there.”
“As with most natural disasters in
recent years, we anticipate that the
combination of insurance money and
government aid will roughly cover the
full cost of the property damage and
the lost economic output.”
Relevant to the construction indus-
try, Zandi said the impact on eco-
nomic growth will depend on labor
availability. “There were already
mounting labor shortages in both
Texas and Florida before the storms,
and they will surely be much more
acute in their wake,” he wrote. “Entic-
ing construction workers in other
parts of the country to the storm-rav-
aged areas won’t be easy, even at
higher wages. Nonetheless, we antic-
ipate most of the rebuilding, save to
damaged public infrastructure, to be
completed by the end of 2018.”
Florida Construction News — FALL 2017 – 9