Moody’s Analytics has updated its economic cost projection for southeast Texas to between $51 billion and $75 billion, as catastrophic flooding from hurricane Harvey continues to impact the state.
Moody’s states that ultimately, Harvey could drive an overall loss similar to, or exceeding that caused by Superstorm Sandy, which would make it the second most costliest natural disasters of the last three decades.
As flooding continues to devastate one of America’s largest states, Moody’s has updated its projection figures in light of additional categories of damage since the initial report on Monday.
The projected $30 billion to $40 billion in damages to homes and vehicles remains unchanged, while businesses are looking at an overall damage cost of between $10 billion and $15 billion, says Moody’s. On top of this, damage to infrastructure is expected to add a further $5 billion to $10 billion to the final cost.
Additionally, estimates of lost outputs have also increased in light of the severity of the storm and subsequent flooding. The severity of the flooding means it will take some time for things to return to a more normal state in Texas, with power outages and damages making it difficult for firms to resume business.
In response to this, the expected lost output has been increased to between $6 billion and $10 billion, explains Moody’s.
And while damages to roads and alike will be repaired and businesses, generally, can rely on insurance coverage, a lack of flood insurance take-up by homeowners means reconstruction efforts could be hindered as the aftermath of Harvey unfolds, a storm that Moody’s expects the impact of long-term economic damage to be concentrated in the residential market.
“With the storm threatening to disrupt Louisiana as well, cost estimates may well rise further. If that happens, Harvey could potentially overtake such events as Hurricane Andrew and the Northridge Earthquake of 1994 in terms of total losses as a share of GDP,” warns Moody’s.