PRESS RELEASE Total property damage estimated at $8 billion to $20 billion While Gustav caused widespread moderate physical damage across a broad swath of Louisiana, Ike had a devastating impact focused in large part on several parishes in south Louisiana (e.g., flooding roughly 13,000 to 26,500 homes). The conservative preliminary estimates suggest the total physical damage in Louisiana as a result of Gustav and Ike combined amounts to roughly $8 billion to $20 billion, including insured and uninsured losses. This figure does not include substantial temporary economic activity losses (including $2.5 billion to $5 billion from Gustav alone and an as-yet-undetermined amount from Ike) or economic impacts related to assets in the Gulf of Mexico. Louisiana produces 22.2 percent of domestic crude oil and 10.5 percent of natural gas in the United States. As evidenced by recent spikes in fuel prices, our nation is vulnerable to disruption due to Louisiana’s energy production. Over the next few months, it is expected that the outer continental shelf (OCS) region of the Gulf of Mexico will gradually return to pre-storm levels of production following required damage assessments and recovery procedures. At current market rates, LED’s rough preliminary estimates suggest an output loss due to disrupted oil and gas production of $8 billion to $10 billion from the Gulf of Mexico fields and the Louisiana Offshore Oil Port (LOOP). In addition to energy production, Louisiana produces an estimated 25 percent of North America’s seafood off its coast. These industries along with other essential Louisiana economic drivers were critically impaired due to the destruction caused by Gustav and Ike. LED’s updated estimates suggest that Hurricane Gustav caused roughly $4.5 billion to $10 billion in property damage in Louisiana, including insured and uninsured losses:
While commercial property damage is substantial, temporary business interruptions pose the greatest threat to the vast majority of companies impacted by Gustav. Gustav caused at least some temporary revenue losses for roughly 97,000 employers in Louisiana (approximately 80 percent of total), with small businesses representing the overwhelming majority of impacted companies. Altogether, Louisiana businesses impacted by Gustav incurred roughly $1.5 billion to $3 billion in lost economic output during the primary evacuation period, including two days prior to and after landfall, and will likely incur a total of $2.5 billion to $5 billion in lost economic output due to business interruptions. As part of the economic impact analysis, LED formed a business outreach campaign in partnership with selected regional and local economic development organizations immediately after Gustav’s landfall. By directly contacting more than 1,000 top economic-driver businesses across Louisiana following Gustav and before Ike, LED was able to gather important information to assess economic impact and identify critical business needs. Businesses in the Capital and Bayou regions faced the most recovery-related challenges, including power outages, fuel shortages, telecommunications issues and the inability to get employees back to work due to evacuations, curfews and related issues. LED’s conservative preliminary estimates for Hurricane Ike suggest very roughly $3.5 billion to $10 billion in total property damages, including insured and uninsured losses:
Immediately after Ike’s landfall, LED and its economic development partners directly contacted approximately 300 of the largest economic-driver firms in the parishes that were apparently most heavily impacted to assess their post-hurricane status and to respond to their recovery-related needs. While the majority of companies contacted sustained limited physical damage, some companies in devastated areas are currently experiencing substantial challenges due to severe flooding and related concerns. As such, businesses severely impacted by Ike may need proportionally greater support with mitigating physical damages than those impacted by Gustav alone. In addition to sustaining property damage, Louisiana businesses in impacted areas incurred a substantial temporary loss of economic activity from Hurricane Ike due to evacuations, power outages, and/or flooding. LED will estimate the amount of lost economic output due to Ike as more specific information becomes available on the extent of flooding and supply chain challenges. LED’s economic impact estimates have been used to support the state’s efforts to secure federal recovery dollars and expand the number of parishes eligible for federal disaster assistance. LED officials continue to emphasize that the updated estimates are still preliminary and subject to adjustment as additional information becomes available. In addition to determining the economic impact of Gustav and Ike, LED has initiated several recovery efforts to help Louisiana businesses resume normal operations. Almost immediately after Gustav, LED launched the Business Recovery Information Center to provide recovery-related information and contacts for impacted businesses. The information center is available 24 hours a day, seven days a week, at 1.877.610.3LED (3533). LED also initiated a business recovery web page, LouisianaForward.com/BizHelp, as an additional information source for hurricane-impacted businesses and released a one-page summary of business recovery resources in partnership with Louisiana Workforce Commission (LWC). Businesses needing further assistance can also visit one of six Louisiana Business Counseling Centers established in partnership with LED, U.S. Small Business Administration (SBA), Louisiana Small Business Development Center Network (LSBDC) and regional economic development partners. The centers, located in Alexandria, Baton Rouge, Carencro, Lake Charles, Metairie and Thibodaux, offer one-on-one small business counseling and SBA Disaster Loan assistance. For more information on the Business Recovery Information Center, Louisiana Business Counseling Centers or to sign up for e-mail updates on business assistance, please visit LouisianaForward.com/BizHelp. ### |
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