Nov 04 2012
The Eye of the Storm
While Hurricane Sandy won’t seriously affect the economy, its financial toll is just beginning to take effect.
The force shut-down of business activities on Monday have caused disruptions in supply which are “likely to linger through the rest of the week”, as well as many idled workers- creating even more losses as businesses try to rebuild after the storm. Retail will suffer the most from Hurricane Sandy as consumers will have spent a good deal of disposable income in preparation for the storm, and will have less ability to purchase non-essential goods. Further, November is the beginning of the holiday season, and with consumers spending on rebuilding or insurance costs, retailers, as Burt Flickinger III of retail consultancy Strategic Resource Group predicts, “could lose at least $25 billion in sales this week”. Supply issues associated with damage to factories and the shut-down of six large oil refineries in anticipation for lower demand post-storm could further drive costs for business upwards. The financial damage caused by Sandy could prove to be far greater than the cost of damage to infrastructure and property, as lags in the supply-chain could drive the price of goods up and further discourage consumer spending during the holiday season.
The Daily Finance reports: http://www.dailyfinance.com/2012/10/30/economic-impact-from-hurricane-sandy-wont-derail-economy/