Ian's economic toll in Florida could reach $60 billion to $70 billion

Hurricane Ian leaves behind catastrophic damage and flooding in Florida

Hurricane Ian will have a potentially devastating impact on the state's major industries, with the economic toll from the storm expected to reach tens of billions of dollars.

The state's tourism and hospitality, citrus production. and phosphate mining businesses are likely to face weeks-long disruptions to their operations, according to experts.

The storm, which made landfall in Florida Wednesday as a Category 4 storm, is projected to deliver an $8 billion blow to the tourism sector alone, reflecting about 10% of the state's total tourism revenue. That figure reflects temporary theme park and hotel closures as well as reduced tourism. For example, ahead of the storm Disney announced its theme parks would close for at least two days and some of its hotels would temporarily shut down. 

"With respect to specific industries in Florida, you think of tourism and hospitality and that's likely to take two levels of hits," Chuck Watson, founder of Enki Research, which uses computer modeling to calculate the impact of natural disasters, told CBS MoneyWatch. "There is the physical damage and the disruption from people cancelling travel plans."

The only silver lining is that it's not peak tourism season, Watson noted.

"At least it is the off-season in between summer when people go to Florida and snowbird season, which hasn't quite started yet. It's fortunate from that standpoint. They have time to rebuild and recover because you get more tourism around Thanksgiving and Christmas," he said. 

Watson expects between $60 billion and $70 billion in total economic losses related to Ian, which would rank it among the most destructive storms ever to hit the U.S. By comparison, Hurricane Irma in 2017 caused estimated damage of $50 billion, making it the most expensive storm in Florida history, according to Reuters. Katrina, which slammed Louisiana and other states in 2005, was the costliest hurricane in U.S. history, with estimated losses of at least $125 billion

Ian is expected to regain strength and become a hurricane again on Thursday evening. The storm has left Florida and is forecast to hit South Carolina, where a hurricane warning was issued for the entire coast.

"Agriculture, particularly orange groves, could take a big hit since we are right before harvest and it is the worst time to have high winds," Watson said. 

Roughly two-thirds of the state's orange groves weathered hurricane-force winds. 

"It is one thing to lose this year's crop, but if you damage the trees that's a multiyear problem," Watson said. 

The storm also appears to have caused billions of dollars in physical damage to residential and commercial real estate properties. It remains unclear how much it will cost to rebuild structures that are damaged or destroyed given, with longer term expenditures contingent on future economic conditions. 

"In the current macroeconomy, things like home values and construction pricing are really in flux. When trying to figure out the cost of recovery, that's forward-looking. So you have to take into account interest rates for reconstruction loans and other variables," Watson said.

Oil and gas production unscathed

Oil producers BP and Chevron preemptively halted production at offshore oil platforms in the Gulf of Mexico in anticipation of Ian, but the state's oil and gas fields were spared. 

"The impact should be extremely transitory because the storm didn't go through any of the oil or gas fields," Watson said. "They did precautionary shutdowns, but in a couple days they will be restoring flows. I don't imagine this would be even a blip on the radar as far as actual production nationally," Watson said. 

Orlando man paddleboards through flooding from Hurricane Ian

The bulk of U.S. gas production is located in Texas and Louisiana, while Florida has no refineries, according to Raymond James energy analyst Pavel Molchanov.

"Ian did a lot of damage in the state of Florida, but the oil and gas installations are way to the west of the path of Ian specifically," Molchanov told CBS MoneyWatch. "The hurricanes that disrupted the oil and gas industry in a serious way made landfall in Texas or Louisiana and caused flooding around refineries."

Job losses

For employees in Florida, damaged or destroyed businesses could mean significant job losses.

"When we looked at the history of hurricanes and how the economy was affected, you see a pretty clear pattern of loss of jobs as businesses are shut down because of the weather or because they've suffered damage from storms," said Sean Snaith, national economist and director of University of Central Florida's Institute for Economic Forecasting.

Hurricane Ian downgraded to a tropical storm but officials say storm threat remains

On the flip side, after natural disasters employment in the construction industry tends to spike as properties require rebuilding.

"One big myth, though, is that somehow it's good for the economy," Snaith said. "But you don't grow your economy by destroying. All these businesses that were damaged and shut down, all these homes that aren't inhabitable aren't producing any goods and services — they aren't providing any shelter."

"Certainly there will be a flurry of activity to repair and rebuild," he added. "But in the meantime, those affected businesses aren't producing anything."

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