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Closed ports, lost the power: How storm could hurt area economy

WASHINGTON – Gates close. Farmers are moving from pigs to higher ground. Dealers are moving cars in the service bays for refuge. And up to 3 million customers in North and South Carolina could lose power for weeks.

In south Carolina, Virginia and Georgia, companies brace for the economic damage caused by Hurricane Florence is expected to bring to the area. Sectors such as tourism and agriculture will likely suffer, and the losses are not easily or quickly overcome.

As soon as it does arrive, Florence is expected to lash coastal areas with high winds and dumping several feet of water. Floods can prove devastating. The storm will probably be damage to homes and businesses, killing crops, livestock, drowning, washing away cars and suspend much of the economic activity.

“These storms can be very disruptive for the regional economies, and it takes a while for them to recover,” said Ryan Sweet, an economist at Moody’s Analytics.

Love said that he thinks the Hurricane Florence cause the AMERICAN economy the growth slow down a few tenths of a percentage point year on year in the July-September quarter. Michael Walden, an economist at North Carolina State University, calculates that Florence subtract about $200 million of output a day of North Carolina’s $550 billion per year economy until business returns to something normal.

It could have been worse. Labor day meant the end of the peak tourist season in the Outer Banks of North Carolina and other coastal getaways. There are now fewer tourists to send away.

In fact, as with the aftermath of previous hurricanes, the region could eventually be an economic boost after construction workers come to build and repair damage and insurance payments and federal disaster aid to flow in.

“The ironic thing is, that if there is a rebuilding effort, which can strengthen the local economy,” Walden said.

“Usually we see a stimulus effect that creates jobs and increases incomes for South Carolinians,” said Joseph Von Nessen, a research economist at the University of South Carolina. Rent is likely to be especially strong in the construction and to the retailers that sell building materials and supplies.

Hurricane Florence is slamming a region that is economically diverse and extensive. Combined, North and South Carolina have an economy larger than Saudi Arabia. High-tech auto plants co-exist with the beach, bed-and-breakfast inns and peanut farms. North Carolina’s Duplin and Sampson counties, just inland, to sell more pigs and hogs than anywhere else in America.

Duke Energy warned that Florence cut off the power to anywhere from 1 million to 3 million customers in North and South Carolina, potentially, leaving them without electricity for a few weeks, said the spokeswoman Grace Rountree.

Two major fuel pipelines in the hurricane’s path, but analysts say that they think that the storm is unlikely to disrupt the flow of gasoline or other products. Still, the analysts of S&P Global Platts say it is possible the Colonial and Plantation pipelines can be affected by power outages or damage to the pump stations. Those pipelines carry fuel from the Gulf Coast to much of the eastern United States.

Analysts expect a temporary boost in gasoline demand as people flee from Florence, followed by a weaker demand during and immediately after the storm. But the damage to energy installations is likely to be much milder than the devastation left by the Hurricane Harvey, who last year battered Houston, the heart of the AMERICAN energy industry. Flooding closed refineries along the Texas and Louisiana coasts and caused gasoline prices to spike.

No ships were entering or leaving the Port of Virginia in Hampton Roads on Wednesday. And the port of Charleston, South Carolina, is the suspension of the operations from Thursday to Saturday and possibly on Sunday.

And Florence will almost certainly push auto production in South Carolina, where Volvo has already decided to establish a new factory near Charleston, because it is in an area that is under mandatory evacuation orders, said spokesman Russell Datz. Volvo is the coordination with suppliers of components, so that it is ready to resume production, according to Datz, who said that he was not sure how long the plant would be.

Three hours to the north-west in Spartanburg, BMW’s vast SUV-factory remains open. But rail cars with the car on the way to Charleston and export markets abroad have been moved to safe areas until the storm passes. Spokesman Kenn Sparks said BMW is monitoring parts supply plants, which can be affected by the storm.

At auto dealers in 48 counties of Virginia and North and South Carolina, Florence could destroy about 125,000 vehicles, Citi Investment Research analyst Itay Michaeli estimated in a note to investors. It can also cut the September car sales by about 110,000 vehicles, which would need to be made, that later, ” he wrote.

Analysts at Cox Automotive predicted that Florence does not destroy as many cars as the Hurricane Harvey did in the car-dependent Houston area. Although about 9 million vehicles in Florence path, the area has only approximately 162 vehicles per square kilometre, less than half of the figure in the car-crazy Houston. Many car dealerships on the coast were already closed Wednesday before the storm.

But even in the inland dealers are bracing for the damage. Workers in Florence Toyota in Florence, South Carolina, plan to attract high-value luxury vehicles in the service bays on Thursday to protect them.

“We will probably move some of our bigger trucks in the front of the building to try to stop some of the clutter,” said Terrell Small, the new cars on the sales manager.

The city of Florence, about 70 miles northwest of Myrtle Beach, was able to absorb 70-110 mph winds and 3 to 6 inches of rain, according to the National Weather Service. The area is under tropical storm and flash flood watches in the weekend.

Small said the precautions have worked in the previous hurricanes, but he said that he remained wary of the flooding potential of the storm with the same name as his city.

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Krisher reported from Detroit. AP Business Writer David Koenig in Dallas contributed to this report.

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