The landfall of Hurricane Harvey had a direct impact on industrial production, including oil and gas extraction and manufacturing. From the latest G. 17 report, which is produced monthly
by the Federal Reserve Board:
Industrial production declined 0.9 percent in August following six consecutive monthly gains. Hurricane Harvey,
which hit the Gulf Coast of Texas in late August, is estimated
to have reduced the rate of change in total output by roughly 0.75 percent. The index for manufacturing decreased 0.3
percent; storm-related effects appear to have reduced the
rate of change in factory output in August about 0.75 percent. The manufacturing industries with the largest estimated storm-related effects were petroleum refining, organic
chemicals, and plastics materials and resins.
The output of mining and other extraction fell 0.8 percent
in August, as Hurricane Harvey temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas.
At 104.7 percent of its 2012 average, total industrial
production in August was 1.5 percent above its year-earlier
level. Capacity utilization for the industrial sector decreased
0.8 percentage point in August to 76.1 percent, a rate that
is 3. 8 percentage points below its long-run (1972–2016)
Gauging the likely impact of the recovery is challenging
at best, but research on the aftermath of Hurricane Andrew,
which ravaged southern Florida in 1992, is insightful. It was
the costliest natural disaster in the U.S. at that time. Insured
losses totaled $27 billion in inflation-adjusted dollars; agri-
cultural losses came to $2 billion in 2017 dollars. It halted
about 5 percent of the Gulf of Mexico’s oil and gas produc-
tion and caused energy prices to increase substantially.
Excerpts from Hurricane Andrew, 25 Years Later, published Aug. 24, 2017, but the Federal Reserve Bank of Atlanta:
• During the 18 months after Andrew, recovery-related
activity boosted spending in South Florida by roughly $3.8
billion, according to a 2007 research paper by Lake Forest
College economist Robert Baade and coauthors Robert Bau-mann and Victor Matheson of the College of the Holy Cross.
In addition to construction firms and suppliers of goods such
as building materials and appliances, mobile home manufacturers in central Florida and boat builders and repair services enjoyed brisk post-hurricane business.
• Andrew wiped out about 6,600 jobs in the month it
struck. That decline quickly reversed, though, as metro Miami added 108,000 jobs by the end of 1992.
• Since 1992, metro Miami has [had] a 59 percent expansion of nonfarm employment, far outpacing national employment growth of 34 percent in that period, according to
Hurricane Harvey Sets
Back Industrial Production