With floodwaters still rising and damage estimates piling up, analysts expect just a modest dent in the U.S. economy from Hurricane Harvey this quarter, with reconstruction efforts likely to be substantial enough to boost growth later this year.
In a Bloomberg survey of 17 economists conducted Monday and Tuesday, respondents estimated the storm will lower the third quarter’s annualized pace of gross domestic product expansion by 0.2 percentage point, according to the median projection. Rebuilding would then give growth a bump in the fourth quarter by the same amount, they estimated. A broader survey prior to the storm estimated a growth pace of 2.5 percent for the third quarter and 2.4 percent from October through December.
The responses fit with wider research on natural disasters over several decades in multiple countries, showing a relatively neutral impact over time. Short-term economic damage is typically small on a national basis and often