Salient to Investors:
Economic Outlook said Sandy reconstruction and related purchases and hiring may increase US economic growth by 0.5 percentage point in 2013. Bernard Baumohl at Economic Outlook said construction costs will be more than replacement because much of the work will involve fortifying structures.
Goldman Sachs said Sandy may reduce economic growth by 0.25 percent to 0.5 percent in Q4, and most of the reconstruction will take place in Q1 2013, adding as much as half a point to growth.
Jeff Burchill at FM Global said insurance claims payments and government funds typically boost the economy for 18 to 36 months after a natural disaster. Gary Schlossberg at Wells Capital Mgmt said reconstruction following a storm has an effect similar to a government-funded stimulus program.
The Bureau of Economic Analysis says economic output in the New York City region in 2010 was 8 percent of GDP and greater than Mexico’s economy.
Mark Zandi at Moody’s Analytics said the rebound after Sandy isn’t a sure thing because airlines flights and restaurant meals are lost forever.