Economists estimate that Hurricane Irene caused billions of dollars in damages. But they say the rebuilding effort can turn into a source of support for the stagnant economy,
Politico reports.
“We are now upping our estimate of fourth-quarter GDP in the U.S. economy,” David Kotok, chairman of money management firm Cumberland Advisors, told the news service. “Billions will be spent on rebuilding and recovery. That will put some people back to work, at least temporarily.”
Cumberland forecasts annualized economic growth of 2-3 percent for the fourth quarter. That would represent quite a jump from the 1 percent rate in the second quarter.
Mark Merritt, president of crisis-management consulting firm Witt Associates, also sees the hurricane helping the economy in the months ahead.
“After a disaster, there’s always a short-term increase,” he told Politico. “There will be furniture bought, homes repaired, new carpet, new flooring, all the things affected by flooding.” But the benefit won’t last long as insurance companies and utilities raise their rates, he said.
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