Harvey’s economic impact on Houston will be lower than initially feared

The Greater Houston Partnership has published its initial estimates of the impact of Harvey on the Houston economy and they are lower than initially feared.

The main points are

  • In terms of 120+ entities represented on the Board of the Partnership, a quarter said that less than 6% of their employees were affected, half said that 6-10% were impacted, and a quarter said that over 15% of their employees were impacted.
  • According to the Texas Dept of Public Safety, 72,000 single family homes in the Houston metro area were damaged or destroyed (5% of Houston’s stock).
  • Only $6.5-$9.5 billion of the $25-$37 billion in residential damages will be covered by insurance.
  • About 300,000 vehicles with a value of $2.4 billion were damaged by Harvey.
  • FEMA has approved $202 million in disaster relief to residents in the Houston metro and the Small Business Administration has approved $104 million in small business loans.
  • September job losses in the Houston-Beaumont area are forecast to be between 42,000 and 74,000. By November, employment should exceed pre-Harvey levels.
  • At the peak, about 25% of US refinery capacity was shut down, it’s now less than 10%.
  • Construction contractors have complained of skilled labor shortages for some time, so
    the pace of rebuilding may be slower than hoped for.

UPDATE 9/16 : Apartment Data Services have surveyed 80% of the area complexes. Only 2% were damaged. That’s much lower, even in absolute terms, than from Tropical Storm Allison in 2001. Since Harvey average rents have risen by $12 (1.25%) to $966 a month. Those figures are before rental concessions. Prior to Harvey, many tenants were offered 3 months’ free rent. Those concessions have disappeared since Harvey.

Moody’s Analytics now estimates that Harvey’s total economic impact is $97 billion ($87 billion property damage and $10 billion in reduced output). This compares to Katrina which cost $175 billion ($144 billion property, $31 billion in reduced output).

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