This might sound counterintuitive, but according to experts Hurricane Sandy will actually boost the economy.
Sandy, which swept through mid-Atlantic and Northeastern United States, caused an estimated $30 to $50 billion worth of damage and more than 120 deaths. Certainly, this isn’t the most important issue the region is dealing with, but it is a historic trend that following natural disaster, certain business sectors see a boost, which results in economic growth.
So how will it improve the economy? Construction is one sector that will see increased business. “The biggest impact will be on housing, construction, and retail sales…The initial decline in these areas will be followed by a boost in building materials purchases, added construction, and some home sales, as families who lost homes enter the market,” reports the Business Insider. Some had suspected early on that this would be the case. With the damage now being assessed, that projection continues.
According to a Forbes article, “Companies in the housing and construction sector, like Home Depot, Loews, KB Home, and Lennar, could see a meaningful boost in the coming months from the rebound in activity. Beyond the human tragedy, there may be a silver lining to Sandy.”
The auto industry could also see a boost. According to Reuters, at least 16,000 new cars and as many as 250,000 used cars might be junked following Hurricane Sandy. Major automakers like GM have yet to give their tallies.
New cars had been moved to safer spots, but some, for instance at the port of Newark, were destroyed. Drivers may have to replace cars that were ruined, which could bump sales. Dealers, which are slowly reopening their doors, are already offering deals on new cars.
Reuters reports that 350,000 cars were destroyed during Hurricane Katrina.