In the wake of one of the most devastating hurricane seasons in recent memory, pundits everywhere are weighing in. Here's what we know so far about the impact of Hurricanes Harvey and Irma:
- Death toll: Harvey killed at least 70; Irma at least 69
- Physical damage: Harvey's bill is estimated at $200 billion; Irma, a mercifully low $50 billion.
- Economic impact: This one's complicated, as property damage, joblessness, inflation, and dings to GPD all factor in. But many economists don't think hurricanes are a net-negative for the economy when all's said and done because rebuilding efforts stimulate the economy. (This is hardly any consolation for those directly impacted, obviously.)
In short, hurricanes battering the Gulf Coast and eastern seaboard aren't a good thing, but their economic impact is definitely not simple to evaluate. The same is true for their effect on small businesses. Take Hurricane Katrina in 2005, for example. About 19,000 New Orleans-area businesses shut down forever after the storm, but about 75% of all affected businesses re-opened, thanks in part to $6.5 billion in SBA loans for hurricane relief.
At Womply, we've been doing some in-depth analysis on the true impact of hurricanes, and we'll have more on that soon. In the meantime, First Data revealed some information to Digital Transactions and other publications that shows the profound short-term impact of Hurricanes Harvey and Irma. Here are the main takeaways:
- In the Miami area, consumer spending spiked just before Irma made landfall and then plummeted 57% compared to prior-year levels.
- During the week of August 25-31, when Harvey made landfall in Texas, retail sales in Houston dropped 59% compared to the previous week and total consumer spending fell 42.5%.
There were some silver linings. As Jim Daly wrote in Digital Transactions:
In the Miami metro area, the data reflect the hurried efforts by residents to board up and otherwise protect their homes and hunker down, and prepare to evacuate. During week ending Sept. 7, sales of building materials jumped 66.4% from the corresponding week in 2016, and rose 55% from the previous week, First Data said.
At the same time, local gas stations posted sales growth of 63.2% year-over-year, and nearly 51% from the prior week. “Grocery stores were blitzed as well, as spending surged 41% year-over-year, and 21.6% week-over-week,” First Data’s Florida analysis says.
Clearly, big disasters have a big impact on small business revenue in the short-term, to say nothing of damage to physical property. Our data confirm the drastic nature of the storms' affects on revenue, but also reveal a surprisingly quick rebound. Stay tuned for more soon!
To our small business friends in Texas and Florida, stay safe. If you have an inspiring story about how your business weathered these powerful storms, please drop us a note at email@example.com.