Moody's: Damage from Harvey and Irma could hit $200B
- The combined value of property destroyed by Hurricane Harvey in the Gulf Coast and Hurricane Irma in Florida could hit between $150 billion and $200 billion, CNBC reported, citing Moody’s data.
- Harvey's total cost is estimated at between $86 billion and $108 billion while Irma is forecast to cost between $64 billion and $92 billion, putting combined damages on par with Hurricane Katrina.
- Although the storms are expected to dampen economic prospects during Q3, they’ll likely help the overall economy and the construction industry to a solid Q4. The speed at which rebuilding efforts and, in Florida, tourism gets underway will determine the pace and extent of recovery.
The challenges to recovery are wide-ranging as the two large and growing markets assess the damage and begin to rebuild.
The ongoing shortage of skilled construction labor is one of the biggest hurdles expected to impact rebuilding efforts. Even before the storms, seven in 10 contractors nationwide said they had trouble finding qualified workers, according to a survey last month by the Associated General Contractors of America.
Slate notes that labor conditions across the economy are tighter now than they were immediately post-Katrina, to which Harvey, in particular, has been compared. While the number of workers in the affected areas likely will not be sufficient, the extent workers could be drawn from other markets is limited. Texas has state-level reciprocal license agreements with several states for the specialty trades and it doesn't regulate roofers or general contractors, both of which could help fill the pipeline. Some municipalities have their own rules, however, and the limited oversight puts residents at risk of scammers.
In the Houston metro area alone, between 10,000 and 20,000 construction workers will likely be needed for repair work in the next 12 months, said Rob Dietz, chief economist at the National Association of Home Builders. The surge in activity throughout the Gulf Coast and the Southeast is expected to push up prices for building materials, specifically lumber, PVC, drywall and roofing, Dietz said.
Other concerns are more immediate. In Florida, returning power to the hardest-hit areas of the state could take days or weeks, The Washington Post reported. The Department of Homeland Security estimates that the power outages experienced across Florida during the storm are the equivalent of one in 22 Americans losing power.