Economy
Hurricane Hits U.S. Economy, Not Just Houston
Written by Tim Triplett
August 30, 2017
“Hurricane Harvey was an incredibly expensive, economy-changing event. The impact will be staggering,” said economist Chris Kuehl of Armada Corporate Intelligence, speaking at Steel Market Update’s Steel Summit Conference this week in Atlanta.
Perhaps 10 percent of Houston’s population could be permanently displaced, creating a future labor shortage. “Companies may not get those workers back,” he said.
About 47 percent of U.S. refinery capacity has been affected by the floodwaters. Gasoline prices are likely to rise by 20-80 cents, at least temporarily, he estimated.
The cost of recovery will reach into the tens of billions. “It will be a major economic event for an extended period of time,” he added, at a delicate time in Washington when sensitive talks about the debt ceiling and other funding issues are currently under debate.
Macroeconomic Advisers, another forecasting firm, reports that the economic impact of the storm could cut 0.3 to 1.2 percentage points off the 3 percent U.S. economic growth expected in third quarter.
Speaking at SMU’s conference, analyst John Anton of IHS Markit said the market fundamentals point to marginally declining steel prices. While he did not change his forecast, he did alter the timing. “Think of all the OCTG and line pipe in Houston that is now under water and will have to be trashed,” he said. That will lower the supply while the recovery process raises demand. Thus, he does not expect steel prices to start their decline in the second half as he originally predicted.
Delays at the Port of Houston, which is responsible for more than 30 percent of all steel imports, could limit import shipments, giving temporary support to steel prices and an advantage to domestic suppliers, say other analysts.
Zekelman Industries is among many companies in the steel industry that have reached out to assist the victims of Hurricane Harvey. The company has pledged that for every dollar its employees, suppliers and customers contribute, Zekelman Industries will match that amount, up to a total of $250,000. Those considering a donation to the Red Cross to help with the relief efforts can click here to trigger a match from Zekelman.
Steel Market Update is among the contributors with a $5,000 donation.
Tim Triplett
Read more from Tim TriplettLatest in Economy
Architecture firm billings remain down in January
Architecture firms continued to report a sharp reduction in billings in January, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek.
New York state manufacturing rebounds in February
Business activity in New York state’s manufacturing sector recovered nicely in February after a sharp decline the previous month, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York. The general business conditions index rose 18 points to 5.7. This is a diffusion index, where a positive reading signifies […]
Dodge Momentum Index jumps to record high in January
The Dodge Momentum Index (DMI) rose to a record high in January, according to the latest data released by Dodge Construction Network.
CRU: China hits back with retaliatory tariffs on US
Targets include coal, liquified natural gas, crude oil, and other commodities
ISM: Manufacturing expands in January for first time in years
Following more than two years of contraction, US manufacturing activity rebounded in January according to the Institute for Supply Management.