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A Storm to Remember: Hurricane Harvey and the Texas Economy
A Message from the Comptroller
Published February 2018
In 2017, we saw massive destruction along U.S. coastlines from hurricanes Harvey, Irma and Maria. Texas, of course, was ground zero for Hurricane Harvey, one of the costliest storms in American history.
Harvey devastated much of Southeast Texas in August, earning a page in the history books for its overwhelming winds and flooding. The storm brought unprecedented destruction to parts of our coast; dozens died and many more lost homes, automobiles and livelihoods. Many small communities may require years to recover, and some may not recover completely.
But Texans are resilient, and so is our state. While the initial impact of Harvey was severe, the Texas economy has already absorbed much of the damage from this record-breaking storm and should avoid long-term losses.
It may take years to tally Hurricane Harvey’s toll on Texas, but we’ve been working hard to analyze the net impact of the storm based on the data we’ve seen so far.
Our analysis takes a wide-ranging view of the consequences, using a dynamic input-output model to measure the storm’s economic impacts, both negative and positive, on our state. We estimate lost business productivity from the storm resulted in a $16.8 billion decrease in gross state product (GSP) — but that’s only part of the equation, because gains to GSP stemming from recovery efforts and increased construction activity are likely to offset most of this loss.
As you’ll see in this report, we estimate the net impact of Hurricane Harvey will be a loss of $3.8 billion in GSP during the first year following the storm, with a cumulative gain of approximately $800 million over three years.
In this special edition of Fiscal Notes, we examine the effect of Harvey on the state economy through data modeling. We also look at recovery efforts and possible opportunities to prevent other flooding disasters in the future.
Glenn Hegar
Texas Comptroller of Public Accounts
The statements contained in this report and the information referenced in it that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Comptroller’s expectations, hopes, intentions or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this report are based on information available to the Comptroller on the date of publication, and the Comptroller’s office assumes no obligation to update any such forward-looking statements. It is important to note that actual results could differ materially from those in such forward-looking statements.
The forward-looking statements included here are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including those relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or not taken by third parties including customers, suppliers, business partners and competitors and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Comptroller’s office. Any of such assumptions could be inaccurate and therefore there can be no assurance that the forward-looking statements included in this report will prove to be accurate.