As Hurricane Irma barrels toward Florida, analysts predicted the massive storm could inflict even more financial harm on the state than Hurricane Harvey did on Texas and Louisiana.
Insurance industry losses from Irma could top $100 billion, according to investment bank UBS, or more than five times the industry’s expected hit from Harvey. Total economic losses in the state, including destroyed infrastructure and lost productivity, could be much higher because most of the damage likely will result from flooding, which isn’t covered by most homeowners’ policies.
By comparison, Texas Gov. Greg Abbott said the losses from Harvey could exceed $150 billion.
Irma, a Category 5 hurricane with sustained winds topping 150 miles per hour, is made landfall in Florida last night. Officials in Miami-Dade, Broward, Pineallis, and Monroe counties in Florida, among others, have issued mandatory evacuation orders, while Florida Gov. Rick Scott has urged residents to leave, noting that the storm “is bigger than our entire state.”
Plywood and groceries are in short supply as Floridians loaded up on the items ahead of Irma, which has devastated some small Caribbean islands, leaving nine dead and thousands homeless. Residents in the state boarded up their homes, took their boats out of the water and gassed up their cars. The Florida Highway Patrol escorted tanker trucks sent to replenish gas stations as supplies ran short and tempers flared.
Real estate analytics firm CoreLogic estimates that more than 8.4 million residential and commercial properties in Florida are at either “extreme,” “very high” or “high” risk of wind damage from Hurricane Irma. Another 3.5 million properties in the state are at risk of hurricane-driven storm surge. According to AccuWeather, high-rise buildings in areas like Miami could be damaged so badly by that they won’t be inhabitable for a year or longer.
The approaching storm is also having an impact on the state’s economy and on investors. Orange juice futures have surged on worries about Irma’s potential impact on the local agriculture sector, with Florida the world’s second-largest orange producer. AccuWeather expects about 20 percent to 25 percent of the state’s crop will be destroyed by the storm. Grapefruit and cotton production also will take a hit.
Florida’s $67 billion tourism industry is already feeling the impact of Irma. Walt Disney Co. said Friday that it will close its Walt Disney World Resort Saturday through Tuesday; Comcast’s Universal Orlando Resort will shut down over the same period. Seaworld also said its Orlando park will take in some dolphins located at a marine mammal park in the Florida Keys, a chain of coastal islands in Irma’s path. Both Seaworld and Busch Gardens, which is in Tampa, will shut down at 5 p.m. Saturday and remain closed through Monday.
With a gross domestic product of around $888 billion, Florida’s economy is roughly the size of Indonesia.
Irma and Harvey are taking a toll on the broader U.S. economy, although experts do not expect a major impact, noting that economic activity typically picks up in the months following a natural disaster as communities rebuild. Jobless claims surged this week as Houston residents sought to start recovering from Harvey. Gasoline prices have surged since the storm caused the shutdown of refineries in the Gulf Coast region.
Meanwhile, hurricane season is far from over. Hurricane Jose, also a Category 4 storm, currently sits east of the Leeward Islands.