Economic Impact of Harvey Could Be Felt Nationwide Before It's Over
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Houston is known as an energy capital, but it's actually a large corporate center, too. The aftermath of Hurricane Harvey will shut down the city's economy and leave plenty of long-term damage as well. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: Chuck Watson studies the impact of natural disasters for the consulting firm Enki Holdings. He's been tracking Hurricane Harvey for days, and he says the huge amount of rainfall it's produced has taken everyone by surprise.
CHUCK WATSON: If Harvey were just a hurricane, it would've only caused maybe $4 or $5 billion worth of damage. At the tropical storm phase, it's actually producing maybe five times that much damage.
ZARROLI: Right now, Watson calculates that Harvey will cause a staggering $30 billion in damage. Houston is an oil and gas center, but it's also home to companies such as KBR, Sysco and Waste Management as well as lots of small manufacturers. They're all shut down now, as are the two airports, several hospitals and the Port of Houston. Bill Gilmer is an economic forecaster at the University of Houston.
BILL GILMER: You've got, you know, the fifth-largest economy in the United States basically sitting at a dead stop for three or four days.
ZARROLI: Gilmer says Houston can quickly make up the lost work. He says the city has been through bad storms before, and residents know how to recover. Gilmer, who lives in a wooded area outside Houston, remembers waking up the morning after Hurricane Ike in 2008.
GILMER: First sound I heard was chainsaws. And I looked out, and all my neighbors were out there clearing the streets, clearing their yards, cleaning up the yards. And then they went out, and they cleaned up all of the trails.
ZARROLI: But Gilmer also acknowledges that the damage from Harvey is likely to be out of scale with anything the city has seen before. Right now, estimates of the damage vary wildly, but the cost of just repairing people's homes will be many billions of dollars. Loretta Worters is with the Insurance Information Institute.
LORETTA WORTERS: There will be some flood - some wind damage, but I think the majority of the losses are going to come from flooding.
ZARROLI: And the great majority of homeowners don't have flood insurance, especially low-income people. So to rebuild, they'll have to take out federal loans. And Chuck Watson says the damage could be even greater depending on how long the rain continues. Watson also worries about something else. Houston's oil refineries haven't been seriously damaged so far. But if they flood, there aren't a lot of companies that know how to repair them.
WATSON: Then you're talking - instead of a couple of weeks, you're talking months to come back online. And then you're starting to think in terms of gasoline shortages and longer-term price hikes. And that's going to have a ripple effect to the whole economy.
ZARROLI: At that point, Hurricane Harvey will become not just a Houston problem but a problem for the whole country. Jim Zarroli, NPR News.