It could take one year for Louisiana to recover from the worst U.S. natural disaster since Superstorm Sandy and to realize the full economic impact of the flooding devastation that left 13 dead and led to 20 parishes being declared federal disaster areas, an LSU economist says.
James Richardson, an LSU professor of public administration, says going forward there will be a short bump in local economies and residents will eventually have to shoulder the burden of getting back to where they were prior to the storm.
“They’ve got to recover their wealth, their assets. They’ve got to do something which is very hard and now probably without the same level of resources they had before,” Richardson says in an LSU news release, adding that most businesses—with the exception of small businesses in Denham Springs—will quickly bounce back.
For now, a boost in the local economy should be expected as individuals will eventually purchase replacement appliances, furniture and vehicles, he says. Big box stores such as Wal-Mart and Target will see spikes in sales.
Restaurants also will benefit as people affected by the storm will eat out, he says. Monies from federal assistance and bank loans will bring more dollars into the local economy.
“In about a year or so, that’s when you start seeing the drop-off,” Richardson says. “(People think), ‘I don’t need to buy more things and I need to start paying back my debt.’”
The recovery will be complicated by housing issues, he says. Private insurance dollars will do little to aid in the state’s recovery because many lacked flood insurance.
People will largely rely on their own personal assets, refinancing their homes and bank loans, but the financial burdens will fall on individuals.
The state economy will see the effect of the flood in a much different way, he says. “The first element is it’s taking all of the time of the governor, the commissioner of administration, and most of the cabinet officers to deal with this. So that means that if there’s any other pressing issues, they really just have to put them on the back burner and everybody understands that,” Richardson says.
