Irma and Harvey could affect your finances, no matter where you live
Inside Subprime: September 12, 2017
By Caroline Thompson
In the aftermath of the two most devastating concurrent storms to make U.S. landfall in recent history, Americans living in Texas, Florida, Georgia and South Carolina are now beginning the long, expensive process of piecing their lives back together. But even those living well outside the path of Hurricanes Harvey and Irma may soon find themselves in a bit of a financial crunch thanks to the superstorms’ effect on various national industries.
In addition to driving up the prices on Florida-grown oranges and Texas-drilled oil, the storm may affect the 401k savings of many Americans. According to an article in USA Today:
“Publicly traded companies whose shares are found in many retirement portfolios, including Comcast, Newell Brands and auto retailer Group 1 Automotive, are among those saying the storms will hurt business or financial results.”
Plastic, which is manufactured using fossil fuels, is also expected to rise in cost, meaning everything from milk jugs to Halloween masks are going to see an up to 20 percent price increase until the industry goes back to normal.
“Virtually every major plastic producer has been affected by Harvey,” Nick Vafiadis, vice president of plastics at IHS Markit, a research consultancy firm told USA Today. “A tremendous amount of manufacturing has been lost.”
Furthermore, the tourism industry is taking a post-storm hit, as sweeping cancellations caused Carnival to lose 3 to 5 cents per share, and major hotel chains are allowing tourists with trips booked in affected areas scrap their reservations without paying a cancelation fee.
While prices at local grocery stores, hardware stores and gas stations across the country are likely to rise, there are some U.S.-based companies that are expected to make a profit in the coming pos-storm weeks and months. In fact, according to CBS News, “because of the way GDP growth is calculated, the rebuilding efforts are expected to largely cover the losses related to the displacement of millions of souls and billions in property damage.”
The auto industry may see a nice boost in sales, as Texans move to quickly replace the nearly 500,000 vehicles – many of which are American-made pickup trucks – destroyed by Harvey and Irma. Additionally, Home Depot stocks are already rising as business booms with storm survivors hoping to DIY their homes’ damage. Even the insurance industry, which will be paying out millions in damage relief to customers who had the foresight to sign up before the storms struck, likely won’t take too big a hit due to the fact that so many Houston-area homeowners lacked flood insurance.
“UBS analysts estimate the impact between $10 billion and $20 billion, something they believe, avoiding the need for capital raising,” wrote Anthony Mirhaydari for CBS News.
Check out these related articles from the OppLoans blog:
- How to Avoid Scam Contractors and Fake Charities Post-Natural Disaster
- Flood Preparedness: 10 Low-Cost Expert Tips
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