Experts: Sandy takes $10 billion toll on LI economy
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Superstorm Sandy cost the Long Island economy up to $10 billion, according to experts.
That's nearly one month's worth of gross domestic product -- the sum of all goods and services produced in Nassau and Suffolk counties -- which totaled $122.5 billion in 2010, the most recent available data from IHS Global Insight. The Englewood, Colo.-based economic forecaster does work for New York State government and calculated Sandy's local toll for Newsday.
William C. Dudley, president of the Federal Reserve Bank of New York, said Thursday that economic activity in the region potentially shrank $3.8 billion each day that business was completely stopped. He declined to estimate how many days had been entirely lost to Sandy; several economists told Newsday the region lost at least two full days of commerce, and the storm's effects lingered long afterward.
Dudley pegged the New York City region's GDP at $1.4 trillion per year. "The damage and disruptions from the storm do appear more extensive and longer-lasting than first anticipated," he said in a speech at Pace University's Manhattan campus.
Dudley, along with IHS Global forecasters and local economists, predicted Sandy-ravaged communities such as Long Beach, Freeport, Babylon and Lindenhurst would take longer to bounce back than the New York City region in general.
"While the storm had many severe effects . . . I do not expect the storm to derail the region's ongoing economic expansion," which has been slow but steady, Dudley said.
The economic impact of Sandy on Long Island is diverse and widespread. Some of it might be offset by increased spending on construction and money from insurance companies and government.
Jobs disappeared when businesses closed for good. Wages and sales were lost because companies couldn't open and their customers couldn't get to them. Thousands of homes, cars and other possessions were destroyed. The New York Stock Exchange was closed for two consecutive days for weather-related reasons for the first time in 124 years.
Jim Diffley, chief regional economist at IHS Global, said while property damage was extensive, the bigger impact is probably the shutdown of commerce for days because of power outages. He said, "Some spending is lost completely, such as business trips, vacations and restaurant meals that will never be made up."
Gov. Andrew M. Cuomo on Monday asked the federal government for $8.4 billion in reconstruction aid for the Island as part of a $42 billion request. Cuomo said yesterday that he would jointly lobby Washington with New Jersey Gov. Chris Christie, who is asking for $37 billion in Sandy aid, and Connecticut Gov. Dannel Malloy, who wants $3.5 billion.
The struggling housing market in Nassau and Suffolk counties may have a steeper road to recovery. Real estate agents lost sales because of the storm -- and they expect a further slowdown in home buying and selling in the coming months.
Still, Andy Yakubovsky, manager of Century 21 Prevete-Bastone Real Estate in Massapequa, predicted the slowdown would be limited to the hardest-hit communities.
For some owners of homes and businesses in these areas, the storm set them back years economically.
Andrea Shulman, owner of Pinup Clothing Boutique in Long Beach, doubted she would ever recoup her sales lost to Sandy. Thursday, she opened a temporary store in her home in The Walks, a Long Beach neighborhood.
Her dining room table was covered in designer sweaters, pullovers and tops; gloves hung on the coat rack and a mannequin stood in the corner. Jewelry cases sat on top of a piano.
Shulman, who had no flood insurance, said she's selling the merchandise that she salvaged from her 5-year-old shop on Park Avenue, plus a few new items. She is now using the store's Facebook page, Pinup Lbny, as her sole form of marketing.
Shulman needs to pay off $20,000 in credit card bills before she can even consider looking for a new storefront to rent. "I'm hoping to survive," the 57-year-old said. "But this [Sandy] has put me back a few steps."
Contractors and their employees may be among the biggest beneficiaries of Sandy because they have work after suffering a prolonged unemployment rate of 30 percent or more, said Pearl Kamer, chief economist at the Long Island Association business group.
However, local builders say they haven't seen a significant uptick in business so far.
"I haven't gotten the men and women to work that I believe I should have," said James Castellane, president of the Building and Construction Trades Council of Nassau-Suffolk.