“For Hurricane Charley, I don’t foresee any major impact on the overall economy of Florida,” said Randall G. Holcombe, a Florida State University economics professor.
While individual losses are catastrophic and the effects are felt unevenly from business to business and region to region, increased construction spending actually could add to the gross state product, the broadest measure of the economy, in the coming year, Holcombe said.
In Central Florida, the rebuilding will range from schools and homes that were smashed by trees to airports that lost hangars and light planes. But it will take weeks and months to get good estimates of the economic costs ranging from damaged citrus and commercial foliage to lost wages for displaced workers.
“We’re focusing on the recovery and the safety of citizens right now. We have no numbers or hard data,” said Scott Openshaw, spokesman for the Governor’s Office of Tourism, Trade and Economic Development. “There’s just a lot of hard work to be done.”
After Hurricane Andrew ravaged parts of South Florida in 1992, sales tax revenue rose along with construction spending, boosting the state’s coffers during an economic downturn, said Holcombe, who is one of 11 members of the Florida Governor’s Council of Economic Advisers. The reason: construction supplies are taxable.
“State and local economies will recover pretty quickly, and we saw that after Andrew,” Holcombe said.
Florida’s economy is stronger now than it was more than a decade ago and while the reconstruction spending on everything from homes to hotels will take time to crank up, the benefits will linger for a long time, economists said.
“A year from now, the positive impact might still be felt,” said University of Louisville economics professor Jim McCabe.
Estimates of insured losses from Charley range from $6 billion to $14 billion or more and virtually all of that will flow back into the state through construction spending and related costs.
Most of the losses and rebuilding will be on the southwest coast in the Punta Gorda and Port Charlotte areas, but just as in the case of Andrew, which spared the metro Miami area, Charley missed the densely packed Tampa area.
Representatives of Florida’s Division of Emergency Management said the state does not yet have a breakdown of financial needs that will be forwarded to the federal government for short- and long-term aid and loans. Some of the key industries affected include:
Major resorts south of Tampa Bay directly in the storm’s path also weathered the storm fairly well but small hotels and motels were hit hard along with small businesses and mobile home parks. Tourism is the state’s largest industry, and Gov. Jeb Bush pledged to throw the state’s full support behind the effort to rebuild.
“Get your businesses back up, so you can hire people,” Bush told tourism executives.
Jerry W. Jackson can be reached at 407-420-5721 or jwjackson@orlandosentinel.com.
