Experts: Sandy derailed LI recovery
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Long Island's economy has yet to revive from the knockout punch delivered 90 days ago by superstorm Sandy.
Jobs are being lost. People who once donated food to charities are now applying for food stamps. Pending home sales and consumer spending are both down.
Economists said Sandy, which hit Oct. 29, derailed the Island's recovery from the 2007-09 recession.
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"We're flat on our back right now, and I don't see us recovering until we get enough federal assistance to help rebuild," said Irwin Kellner, chief economist at the MarketWatch financial news service and a former Hofstra University professor.
Along the South Shore, businesses are closing because they lack money to repair storm damage, or because many customers aren't back in their homes -- and those who are have less money to spend.
In Sandy's wake, 7,200 jobs were shed in November, year over year, in Nassau and Suffolk counties, according to the state Labor Department. And those losses weren't made up by December's gain, which was 2,700 jobs.
The employment picture is frightening in storm-ravaged communities. The unemployment rate in Long Beach, for example, was 10.9 percent last month, up 4 percentage points from December 2011. Islandwide, the jobless rate rose three-tenths of a percentage point to 7.1 percent.
Club shuts down
Jack Clarke, of Rockville Centre, has been looking for work since Jan. 4, when his boss at the Middle Bay Country Club told him it was liquidating.
The golf and tennis club in Oceanside suffered $3.5 million in storm damage, including loss of the clubhouse where Clarke worked as executive chef. Memberships fell from about 230 families to 160 as some sought to reduce their expenses or joined other clubs.
Middle Bay's shutdown coincided with the off-season for local country clubs, making it more difficult to find a new job.
Clarke, 51, hopes to land another position at a golf club here or in Westchester County. At Middle Bay he earned $130,000 last year, a $25,000 increase over 2011 because he had built up the club's catering business. Before superstorm Sandy, he was expecting to do better this year.
"We've been waiting five years for this break, and then this happens," said Clarke, who is married with two daughters. "I don't want to go to another club on the water; I'm going inland," he said with a grim chuckle.
Job creation could yet pick up once federal aid and insurance payments swell, accelerating reconstruction of homes and businesses.
Based on the fallout from other disasters, such as Hurricanes Katrina in 2005 and Andrew in 1992, and the Sept. 11, 2001, terrorist attacks, researchers at the Federal Reserve Bank of New York forecast that hiring will soon outpace the number of pink slips.
Job losses are usually concentrated in the first two months after a disaster, Fed senior economist Jason Bram said. "The employment declines resulting from Sandy are likely to be reversed fairly quickly," he said.
Residents 'very fragile'
In the meantime, however, joblessness contributed to a spike in applications for food stamps after Sandy. In November, social service departments in Nassau and Suffolk had year-over-year jumps of 30 percent and 11 percent, respectively.
Though the annual increases in new applications disappeared last month, Island Harvest chief executive Randi Shubin Dresner said, "Many people haven't gotten their insurance money, so they cannot fix up their homes . . . They are very fragile."
Island Harvest distributed 3.5 million pounds of food in the final two months of 2012 to 570 food pantries, soup kitchens and other social service agencies, more than double what it did in November-December 2011.
"People are coming up to our trucks, saying, 'I'm a contributor to Island Harvest, I never thought I'd be on the other side of the truck' " seeking help, Dresner said.
$10B hit on economy
Sandy cost the local economy up to $10 billion, or the equivalent of nearly one month of gross domestic product, according to an estimate prepared for Newsday by the IHS Global Insight forecasting service. Local GDP totaled $122.5 billion in 2010, the most recent available data.
Ninety days after the superstorm, economic statistics show some industries were clobbered while others boomed as the disaster's widespread impact boosted demand for some goods and services such as electric generators and gasoline.
Occupancy rates at hotels and motels soared more than 36 percent in both November and December compared with a year earlier, according to Smith Travel Research, as hundreds of people sought shelter when their homes were rendered unliveable.
Automobile dealerships were packed as motorists sought replacements for thousands of cars and trucks destroyed by saltwater. R.L. Polk & Co. reported new vehicle registrations surged 71 percent in November, year over year.
Residential real estate also may be on the upswing Islandwide. The number of homes in contract to be sold was mixed in December, an improvement over November's dip in both counties, according to the Multiple Listing Service.
However, Sandy's impact on Nassau's South Shore was large: Real estate transactions fell 23.5 percent in the final three months of 2012 compared with the same period a year earlier, according to a report by the appraisal firm Miller Samuel and the brokerage Douglas Elliman.
Kevin Leatherman, owner of the Coldwell Banker Surf brokerage in Rockville Centre, said, "We had three weeks in November where nobody was showing or selling real estate" as buyers and sellers were preoccupied with storm cleanup. "Now, we're extremely busy," he said.
Others predicted big changes in home construction and the abandonment of land that floods repeatedly.
"I think we will lose some of our population; they're simply going to leave," said Pearl Kamer, chief economist at the Long Island Association business group. "Many of them will not have the resources or the will to rebuild their homes. And we don't have much rental housing to accommodate them."
Kamer also was troubled by December's 1.9 percent decline in sales tax collections compared with a year earlier. The collections are a barometer of consumer spending, which accounts for 70 percent of economic activity.
"The local economy is still struggling to recover from the recent recession," she said, "and superstorm Sandy simply made that recovery more difficult."