Irma could cool Florida’s economy
Citrus production, tourism likely to take a beating when storm hits
Hurricane Irma is expected to pose at least a temporary setback to Florida’s sizzling economy as it takes aim at the heart of the nation’s citrus production and batters its robust tourism industry.
But if the storm causes extensive damage that discourages incoming retirees and tempers runaway population growth, the economic effects could be more substantial, analysts say.
Florida is the nation’s top citrus producer and also leads in sugarcane, tomatoes, watermelons and fresh market cucumbers, according to state government data. Farmers are trying to drain fields of excess water, secure equipment and ensure water pumps work in the event of flooding, says Lisa Lochridge, spokeswoman for the Florida Fruit and Vegetable Association.
“With a storm of this size, people are very, very concerned,” she says.
The most immediate worry is the vast orange crop in central and south Florida. Risks to the crop have increased since forecasts altered the storm’s projected path westward, says Chris Hyde, agricultural meteorologist at MDA Weather Services.
“It’s really in the cross hairs of this thing,” he says, adding that a vast majority of the citrus crop could be destroyed.
Since Wednesday, orange futures prices have risen 11 percent, and a similar impact could ripple through grocery stores across the U.S., depending on the actual damage, Hyde says.
Tourism, the state’s largest industry, also faces major disruptions. Florida had 112.4 million out-of-state and international visitors last year and tourism generated $90 billion in economic activity. As of Thursday, the Walt Disney World theme parks in the Orlando area continued to operate as normal but some nighttime events were canceled Saturday and Sunday. SeaWorld and Legoland were both closed Friday.
Some major cruise lines canceled voyages out of the nation’s big three cruise ports.
The total economic losses from the storm are likely to be similar to Hurricane Harvey in the Houston area, said Kwame Donaldson, economist at Moody’s Analytics. Moody’s projects Harvey-induced losses from property damage and lost economic output will total $108 billion, though other estimates have been closer to $160 billion.
For Florida, the nation’s fourth-largest economy, that could slice estimated third-quarter economic growth of 3.7 percent by as much as a percentage point, Donaldson said. The pullback would be offset in subsequent quarters as homes and businesses are rebuilt and consumers make delayed purchases.
For the U.S. economy, the decrease in economic gains would be a more modest two- to threetenths of a percentage point, he says.
Florida’s economy has resuscitated dramatically since the mid-2000s housing crash put it among the hardest-hit states during the Great Recession. The long bull market that began in 2009 has replenished the investments of retirees and so they again have been flocking to the state, said Sean Snaith, an economist at the University of Central Florida. Hispanic immigration also has been brisk.