The third quarter brought a flurry of natural disasters, including category 4 and 5 hurricanes whose economic impacts will take years to unfold, with Harvey primarily in Texas, Irma in Florida, and Maria in Puerto Rico and the Virgin Islands. Preliminary estimates by Moody’s Analytics puts the total combined economic costs of Harvey and Irma at $200 billion, while Maria could top $95 billion. It is too early to quantify the storms’ impact on construction costs, except to say it will be significant for the labor market and key materials.
Experts say it will take one to two years before the full ramifications show up in construction cost escalation. “After [Hurricane Katrina in] New Orleans, the big spike in construction costs came about a year later,” says Julian Anderson, president of Rider Levett Bucknall.