A publication of the Indiana Business Research Center at IU's Kelley School of Business
Share | |

The Katrina Catastrophe

Much has already been written and said about the energy costs to the nation resulting from the devastation brought by Hurricane Katrina. Yet there are other costs and, without being ghoulish, benefits to be considered. Some of these will apply to Indiana specifically.

In the next year, hundreds of millions of dollars will be spent on rebuilding homes and businesses in Louisiana, Mississippi and Alabama. Structures will have to be rebuilt which will require both materials and labor. Infrastructure rebuilding in the devastated areas will have similar effects as bridges, roads, levees, electrical and other systems are restored.

Hoosier workers and businesses can benefit from these efforts. At the same time, projects in the Hoosier state may become more expensive as labor and materials flow to meet the needs along the Gulf coast.

Hoosier businesses will benefit as affected Southern enterprises rebuild their inventories. Orders will flow to our factories to replace goods damaged or destroyed in the storm. Machinery will be in high demand for specialized construction efforts.

None of these anticipations are stated with pleasure. The vagaries of natural disasters are never a source of joy.

Figure 1: Hurricane Damage, 1965 to 2004

Figure 1

Morton Marcus, Director Emeritus
Indiana Business Research Center, Kelley School of Business, Indiana University