(Photo: flood waters in downtown Wilmington, NC after Hurricane Florence / NPR.org)
Guest blogger: Dr. Adam Jones, Associate Professor of Economics, Cameron School of Business, and Regional Economist for the Swain Center (this article originally appeared on WilmingtonBiz.com on October 19)
The Southeastern North Carolina economy was clipping along nicely until Hurricane Florence blew in and bumped us off track, but only temporarily.
Through August, the region’s unemployment rates were down from a year earlier by nearly a half percent for New Hanover and Brunswick counties and showed even stronger improvements in Pender County. In fact, the unemployment rate for New Hanover averaged 3.9 percent through the first eight months of the year – a number well below the natural rate.
In addition, room occupancy taxes for New Hanover County were up 2 percent in a rainy July and 3.3 percent YTD over the year before, while sales tax receipts were up 3.9 percent for the year so far.In short, the economy was continuing to clip along at a sustainable level of growth… then came Florence.While damage estimates for hurricanes are extremely variable and notoriously inaccurate, there is no doubt that the property damage from Florence was substantial. However, disruptions to economic activity are likely to fade quickly.
Looking to 2016 and Hurricane Matthew as a guide, counties in a broadly-defined Southeastern NC saw a moderate bump in unemployment following the hurricane of about two-tenths of one percent in the month following the storm (with the exception of Robeson County, which realized an eight percent jump), but rates came back down the following month.
Economic data often show only minor impacts from major storms as aggregate data masks the changes underneath and gives a false impression, oftentimes signaling economic strength.
Yes, unemployment is low in the region and expected to stay that way, retail sales are expected to be strong in the near future and the housing market is expected to tighten in the coming months as shortages flow through to prices, contrary to the effects after minor storms without significant property damage.
Unfortunately, what we would usually celebrate, this time we bemoan. Employment, retail sales and home prices are measures of activity levels, and there is plenty of activity in the region; things are going on in Wilmington.
But these measures miss the loss of wealth from property damage and temporary disruptions that forced us all to miss work, dig into savings and repair damage to move toward normal rather than forward.
Don’t listen to the many pundits who say storms can be good for the economy.
But – and this is a big “but” – there is one potential benefit from the storm that may have lasting effects – it drew us all together.
By necessity, as we worked to help each other and, in many cases, just survive, relationships and bonds were formed and strengthened. Social capital developed through common experiences will provide us with not just the networks but the true relationships to rebuild better and stronger.
Soon, we’ll start to see data about the storm’s economic effects (hopefully we’ll have preliminary data by the Swain Center’s Economic Outlook Conference on Nov. 7) and to understand what happened economically.
But, more importantly, we’ll begin to put the trauma of the storm behind us and look forward again. #capefearstrong