How Hurricane Sandy Ranks Among Big Storms
It certainly got plenty of press attention, given that Hurricane Sandy struck in the media establishment's backyard. But how does the storm rank when compared to other calamities?
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Pretty large, according to initial estimates of the economic damage from the storm that ravaged New Jersey, New York City and many other parts of the northeast. Damage estimates from Sandy range from roughly $30 to $50 billion, including some activity that consumers may merely put off for now -- such as buying a car or something else they need -- as well as money that simply won't get spent on meals, entertainment or other things, because it's needed to fix a roof or clean up flood damage.
That usually happens during natural disasters, but economists say insurance payouts and emergency government aid can minimize the damage if it materializes quickly -- or worsen the damage if it's slow to arrive. Since many of the areas devastated by Sandy tend to be affluent, that suggests economic aid will quickly help mitigate the damage.
Moody's Analytics recently broke down the estimated damage caused by Sandy into various categories, and compared it with other disasters. Here's how Sandy matches up:
Hurricane Katrina (2005): $157 billion in damage, $167 billion in economic aid.
The Sept. 11 attacks (2001): $99 billion in damage, $98 billion in aid.
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Hurricane Andrew (1992): $55 billion in damage, $36 billion in aid.
Los Angeles Northridge earthquake (1994): $41 billion in damage, $36 billion in aid.
Hurricane Sandy (2012): Between $30-$50 billion in damage, amount of aid still to be determined.
Hurricane Hugo (1989): $22 billion, $11 billion in aid.
Loma Prieta earthquake (1989): $18 billion in damage, $10 billion in aid.
Midwest floods (1993): $18 billion in damage, $9 billion in aid.
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Hurricane Ivan (2005): $15 billion in damage, $15 billion in aid.
Hurricane Irene (2011): $13 billion in damage, $7 billion in aid.
One trend that has helped mitigate the damage caused by recent disasters is increased aid, especially after Sept. 11. Mark Zandi of Moody's Analytics says that if insurance payouts and government funds arrive quickly, rebuilding from Sandy should be well underway by December, with minimal impact on the broader economy. How quickly some of the storm-struck areas recover will then depend on how mild or severe the winter is--and whether any more big storms lie ahead.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
