Here's A First Look At The Economic Impact Of Irma In Florida

It's going to be a long, long time before we fully understand the full financial impact of hurricane Irma on our state. 

While we have a long history of notable storms that have shown us a measurable impact, we really don't have a guide for this one. 

First, the initial cost estimates based on initial assessments:

According to Inki Research, the current cost estimate for Irma damage in the U.S. is $58 billion

While that's one of the most expensive storms on record, it's not even the most expensive storm of the year. Damage from Harvey is estimated around $85 billion

By the way, if we want further context for the size of the devastation caused by hurricane Katrina in 2005, adjusted for inflation, the cost of Katrina is $160 billion (or $17 billion more than the damage caused by Harvey and Irma combined). 

That being said, that's just the cost to rebuild. 

Much of the longer run economic impact will depend on what becomes of the Key's economy. With around 88 percent influenced by tourism/visitors, every day that goes by right now is a huge hit to the local economy. 

Here are a few highlights of the economy of the Florida Keys...

  • While just 79,000 people live in the Keys, more than 4.5 million people visited last year
  • The overall Keys economy totaled more than $4.5 billion in revenue in 2016 
    • Of that $2.7 billion (60 percent) was directly tourist related 
  • 54 percent of the jobs in the Keys are directly linked to tourism as well 

On the flip side, FEMA and insurance money coming into the state can help offset the negative impact of these storms. But when we observe the economic impact of all recent Florida landfalls (from Andrew through Wilma), we see that the overall impact to Florida's economy has been negative. 

The easiest way to track that sort of thing is through revenue to the state. 

According to state records, the net effect of the 2004 hurricanes to Florida was negative $39 million and net loss of $203 million in 2005. 

By the time you account for all of the lost tourism for people who aren't able to carry out their typical vacation plans and you quickly arrive in the billions. 

The state has already indicated that they anticipate a greater than $1.5 billion negative impact on the state's budget over the next three years at a minimum. 

So this is all the more reason to shop local and consider vacationing closer to home for a little while. 

... Especially if you're inclined to take a trip to the Keys. 

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