Accuweather on Wednesday predicted that Hurricane Harvey will be the costliest natural disaster in U.S. history, with a $160 billion negative impact to the economy after the extensive damage, lost wages and sales, and more are tallied.
Accuweather said this represents eight-tenths of 1 percent of the U.S.’ gross domestic product, which is now $19 trillion.
The weather reporting and forecasting service said Harvey’s negative financial impact will be similar to the combined effects of Hurricanes Katrina and Sandy, which have been considered by experts to be among the worst weather events ever in the U.S.
The category 4 Hurricane Harvey, which made landfall on Friday night north of Corpus Christi, has dumped as much as 59 inches of rain on Houston and surrounding environs, caused catastrophic and record-breaking flooding and claimed an estimated 30 lives so far, before moving northeast to the conjunction of Texas and Louisiana. Thousands of people remain in shelters and rescue efforts continue throughout the Houston area.
Accuweather said that parts of Houston will be uninhabitable for weeks, or even months due to flooding, mold, disease-ridden water and other public safety issues.
Dr. Joel Meyers, founder, president and chairman of Accuweather, said some levees are at risk of breach or failure and warned that the storm’s negative impacts “are far from over. There will be more flooding, damage, fatalities and injuries.”
Harvey is expected to make a second landfall in Louisiana on early Thursday morning, continuing to Memphis and Nashville, Tenn., overnight Friday, and Louisville, Ken., in the early hours of Saturday.
Preliminary estimates of retail losses are around the $1 billion mark.
Wal-Mart Stores Inc. continued to make rapid progress, with only 24 stores closed, down from the 92 Wal-Mart units, SuperCenters, Neighborhood Markets and Sam’s Clubs that closed over the weekend as Hurricane Harvey hit. Target Corp. reopened a majority of the 30 stores that were closed, leaving only four units unopened on Wednesday.
The 2.4 million-square-foot Galleria in Houston, with more than 400 stores, including anchors Neiman Marcus and Saks Fifth Avenue, remained closed on Wednesday. Of Stage Store’s 15 Houston stores, Palais Royal on Federal Road was closed on Wednesday.
Harry Ikenson, a retail analyst at Ikenson Research and Consulting, said, “The industry has been going through a very difficult time, with the Internet’s impact coming more rapidly than expected. Retailers had an inventory problem before the hurricane. Now, inventory will be backed up throughout the country. I’m concerned about the chain reaction.”
Ikenson said pricing became more competitive and margins came down before Harvey, causing “many retailers to lower guidance. Some even missed the plans they revised.”
Marshal Cohen, chief industry analyst for The NPD Group Inc., said, “In Houston and in western Louisiana, school starts earlier and much of the priority for back-to-school [buying] has been done. The recovery will be much quicker than the recovery in New Orleans [after Hurricane Katrina]. We’ve learned a lot from that and will see a quicker turnaround time.”
Mass merchants, with a disproportionately bigger market share in the stricken areas, will benefit in the short term from more jobs and income as a result rebuilding efforts, Cohen said.
Nariman Behravesh, chief economist for IHS Markit, said Hurricane Harvey will increase the volatility of growth in the third and fourth quarters.
“As in past storms, Harvey will hurt near-term growth,” he said. “Loss of life, damaged infrastructure [in the energy and chemicals sectors] and disrupted businesses will take a huge toll on the devastated areas. Given the importance of the energy and chemicals sectors along the Texas and Louisiana Gulf coasts, the impact on the overall economy will also be noticeable. However, as in the case of past storms, the reconstruction efforts, which will likely kick into high gear in the fourth quarter, will boost growth.”
The duration of the storm, extent of damage and speed of reconstruction efforts will determine the ultimate impact on third and fourth quarter U.S. GDP. IHS Markit’s third quarter estimated GDP of 3.5 percent is now expected to be cut by 0.5 percent to 0.6 percent, said Behravesh, who expects average growth for the second half of 2017 of 2.5 to 3 percent.
Aid from the fashion, retail and media industries continued Wednesday with more companies stepping forward and articulating their plans.
“We’ve been in constant communication with all of our retail vendors to purchase and acquire merchandise to donate to the Hurricane Harvey relief,” said a spokesman for Marcus Lemonis Fashion Group. “We’ve also contributed $200,000 of our own retail inventory. We’d like to direct people to drop off donations at 16 of our stores. The deadline for bringing clothes to our stores is Thursday at noon. We’ll be shipping everything to relief efforts in Houston on Thursday night.”
Marcus will be collecting both cash and clothing at Camping World locations around the country and matching cash donations 100 percent up to $2 million.
MCM is sending 2,000 cases of diapers — equivalent to 250,000 diapers — to the Texas diaper bank, a spokeswoman said. They are being trucked in.
WWD parent Penske Media Corp.’s 2 percent PMC Foundation will match employee monetary donations dollar for dollar up to $50,000. The drive will continue through the end of September and benefit several organizations, including the Houston Food Bank; Team Rubicon, which brings together the skills and experiences of military veterans, and first responders to rapidly deploy emergency services, and Hurricane Harvey Relief Fund, the locally focused relief fund spearheaded by Houston’s mayor Sylvester Turner.
Hearst will donate $1 million to the Greater Houston Red Cross and match employee donations up to an additional $1 million to the Red Cross efforts across the Gulf region. Hearst has a personal connection to Houston. The Houston Chronicle, the city’s main daily, is Hearst’s largest newspaper with more than 800 employees. In a staff-wide note, chief executive officer Steven R. Swartz said employees and their families are safe, although many of their homes were damaged. The Chronicle made its digital edition free and print editions are being delivered to shelters.
The New York Times plans to mobilize its Neediest Cases Fund, the company’s long-running, annual charitable-giving campaign, to solicit donations for organizations helping hurricane victims. Details haven’t been finalized.
Meredith is hosting an internal donation page on the Red Cross web site. Consistent with its regular policy of matching charitable donations, the company will match employee contributions to Harvey relief.
Time Inc. is matching employee donations to any qualified organization, up to $300 per employee per calendar year. Huffington Post, Yahoo and AOL parent Verizon is donating $10 million to Harvey relief efforts. Oath, the newly named portfolio of Verizon media companies, will match consumer donations dollar for dollar up to $250,000, as well as match employee contributions.
Refinery29 will host a beauty sale to benefit the Global Giving Harvey Relief Fund, and turn it into an Instagram story to inspire their audience to plan similar events. FINN designer Candice Pool Neistat is helping her hometown by donating 100 percent of profits from the sale of her Texas charms, priced $25 to $600, to benefit the Red Cross and JJ Watt’s fundraising campaign. Meanwhile, Lime Crime through Sept. 12th will donate 100 percent of sales of its Beet It Matte Velvetine lip color to the Red Cross.