HURRICANE FLORENCE
At least 35 killed
in devastating floods
Construction opportunities ahead as recovery bill
to be between $38 and 50 billion – or more
North Carolina Construction News staff writer
As North Carolina's death toll from
Hurricane Florence reaches 35 (there
are additional fatalities in South Car-
olina), and flooding continues in
Wilmington and other coastal and in-
land communities, how much will
the rebuilding cost, and how will it
affect the state’s construction econ-
omy? Moody’s Analytics estimates
overall storm damages could reach
$38 and $50 billion – more than dou-
ble earlier estimates. Much of the
money will ultimately flow to con-
tractors and builders, especially in
the residential sector, though the
exact impact on the construction in-
dustry is still uncertain.
“We were close to $10 (billion) on
Friday (Sept. 14), CNBC quoted
4 — Fall 2018 — The North Carolina Construction News
Moody’s Analytics chief economist
Mark Zandi as saying. “The flooding
is more extensive than we had antici-
pated and the storm was slow mov-
ing. It hung over the Carolinas a lot
more than was expected.”
Moody’s says Florence is among
the top seven costliest hurricanes
ever recorded.
While the storm wasn’t extremely
strong in wind strength, coming
ashore as a Category 1, its rainfall
set a record, surpassing Hurricane
Floyd in 1999.
“These estimates are based on
the information available, and there
is a high probability that Florence’s
costs will be revised significantly
higher with added information on in-
land flooding,” Moody’s said in an
earlier report.
The damage is unlikely to impact
large home builders, with home buy-
ing activity simply being pushed fur-
ther into the future, not stopped
altogether. “After three to six weeks of sales
disruption due to clean up and elec-
tricity and infrastructure restoration,
sales should return to positive year-
over-year levels by year end,” JMP
Securities analyst Peter Martin wrote
in a research note. “Given enhanced
building codes for new homes, we
expect most damage to occur to
legacy existing homes, which should
create improved long-term demand
for housing.”
Martin said that is what happened
last year after hurricanes Harvey and
Irma in Texas and Florida. The dam-
age caused some concerns in the re-
sale market, as potential buyers
feared hurricane damage.
“I expect builders to say, we’re
going to have some cleanup ex-
penses,” Martin said in a published
interview. “A couple of houses are
damaged, but we'll defer closings.”