The United States economy surprised experts by shrinking at the end of 2012. Economy-watchers placed some of the blame for the fourth-quarter stall on Hurricane Sandy, as the Newark Star-Ledger reports (“U.S. economy unexpectedly shrank late last year, in part from Hurricane Sandy,” by Associated Press). Whether the explanation is true or not, there’s no doubt that Sandy has been an economic setback for New Jersey and New York in particular — and the affected region is a bigger factor in the national economy than you might imagine, according to New Jersey congressman Rodney Frelinghuysen (“PolitiFact N.J.: Hurricane Sandy-damaged area represents 10 percent of nation's economy, congressman says”).
And a team of economists at Rutgers University says that Sandy’s long-term impact could be either positive or negative for the region. It all depends, the economists say, on whether Federal aid arrives for recovery and rebuilding. Nancy Mantell, Joseph Seneca, and Will Irving, all economists at Rutgers’ Edward J. Bloustein School of Planning and Public Policy, used economic modeling to forecast the post-Sandy track of the New Jersey economy. Their research was announced on the university website (“Rutgers Regional Report: New Jersey economy will suffer significant, long-term damage without Hurricane Sandy restoration funding”) and is their full report is posted here: (“The Economic and Fiscal Impacts of Hurricane Sandy in New Jersey”).
“Following heavy losses in state GDP, employment, and income in the fourth quarter of 2012, the state economy will rebound significantly, with economic activity exceeding the baseline forecast (i.e., without the storm) for 2013–2015,” the study authors included. But they cautioned that the rebound is not a done deal: “These estimates, while showing modest net positive impacts on the macroeconomic performance of the state’s economy in the years following the storm, are in no way meant to imply that New Jersey has benefited, or will benefit, from the storm. The damages, both human and economic, are enormous and real. What is not yet real and accomplished is the spending of the necessary resources to fully repair and rebuild. Only if the state obtains the resources needed to fund the offsetting recovery and reconstruction expenditures will the substantial negative economic and fiscal impacts of the storm be neutralized over time.”
In the short run, meanwhile, Sandy is still having a negative impact. Even downtown Manhattan, the nation’s financial hub, is still impaired, NPR reports (“In Lower Manhattan, Sandy Still Keeping Businesses Dark”). “Con Edison, a New York City energy supplier, says 22 large buildings are still without power, or on only partial power, as well as some smaller ones,” the network reported. “Some stores are barely holding on financially, and may not open until late spring.”
In New Jersey, summer is the season that counts — and it’s far from clear what this summer will look like on the Jersey Shore, reports the International Business Times (“After Superstorm Sandy, Will The Jersey Shore Recover Sufficiently To Be Ready For The Summer Season?” by Mark Johanson). Even the beaches are in question: “A study from Stockton College’s Coastal Research Center indicates that the beaches of the northern Jersey Shore are now 30 to 40 feet narrower than they were before the storm hit,” the Times reports. “Moreover, research from the Army Corps of Engineers indicates that Sandy removed about 10.5 million cubic yards of sand.” But New Jersey Governor Chris Christie is staying positive about the coming year. He said: “No one is conceding the summer of 2013 to Sandy.”