Reports that the entire city of New Orleans is without power and sewage treatment is just the beginning of what this city and surrounding areas will face once Hurricane Katrina weakens and heads farther north. The potential economic impact is astounding if the predictions come to pass. In the insurance industry alone, one forecasting company, Equicat in Calif., estimated a cost of $30 billion earlier this weekend, though the figures have shrunk since the storm weakened to a Category 4 early Monday morning. It now estimates costs at $12 billion. (In comparison, Andrew, which hit Florida in 1992, cost the industry over $25 billion.)
The insurance industry, and businesses related to it, isn't the only one that will feel a hit from Katrina.
**Oil and gas industry -- Oil prices hit $70 a barrel in early morning trading as major refineries from the world's leading producers were threatened. Chevron, Exxon Mobil, Royal Dutch-Shell Group, and BP PLC, among others, all evacuated workers. The Louisiana Offshore Oil Port, the nation's largest oil import terminal, evacuated all workers and stopped unloading ships on Saturday. With an estimated 633,000 barrels of crude oil taken out of circulation, the Bush Administration is considering tapping the nation's emergency reserves.
**Shipping industry -- The Port of Southern Louisiana is one of the nation's largest ports, moving such staples as grain, sugar and timber. How long it will be closed is not known.
**Tourism and gambling industries -- Tourism is New Orleans' lifeblood. Casinos line the Gulf Coast. Reports from French Quarter hotels have windows being blown out, while 10 casinos have closed up shop in Gulf Port, Miss., according to an MSNBC.com video report.
**Agriculture and fishing industries -- Sugar and cotton farmers in the area affected by Katrina are expected to be hit hard, as does the fishing industry, most notably the gulf shrimp industry, noted the same MSNBC.com video report.
With businesses boarded up and likely not to open until floodwaters recede, electricity is restored, and damages have been assessed, it's likely that the hit on business in general will be astounding. But will it all be bad news?
Allen Roberts' article, "Hurricane Season Gives Business a Boost in Florida," illustrated Florida's bounce back from four hurricanes and one tropical storm that resulted $50 billion in damage. The state added 225,000 new jobs from May 2004 and May 2005, with 110,000 being in professional, education, and health service. The state also gained an unexpected windfall of $2 billion in tax revenue.
It begs the question: Is one state's hurricane another state's boon? Florida's recovery seems to hold hope for New Orleans' businesses and those similarly affected by Katrina, but can Louisiana follow in its path? Or was Florida just lucky in its recovery?