(Bloomberg) — Hurricane Ian has left a path of destruction behind, destroying countless homes, ruining citrus crops and risking fragile supply chains, but the storm’s skirting of a key US fertilizer-production area in Florida means the broader US economy was spared from the worst.
Ian hit the coast of Fort Myers in the country’s third-largest state just shy of the most-powerful Category 5 level on Wednesday and made a second landfall in South Carolina Friday. In addition to the human tragedy, the storm is set to be one of the top-10 costliest storms in the US, resulting in about $70 billion to $120 billion in economic damage.
The impact is broad in Florida, including insured and uninsured residences, office buildings, infrastructure and a hit on the key tourism industry. The closure of southeastern distribution channels for products ranging from autos to retail goods may have a domino effect on the rest of the country. But a more lasting hit to inflation was likely avoided as the storm spared a critical production center for fertilizer used by farmers in the US and around the world.
“The storm is devastating for some of the counties in Florida, but the macroeconomic impact is fairly minor,” said Ryan Sweet, head of monetary policy research at Moody’s Analytics. He forecasts the resulting decline in economic output — including lower consumer spending and paused business activity — may shave a few tenths of one percentage point off third-quarter economic growth.
Alongside the devastation in some Florida counties, Ian has exposed the growing risk of climate disasters and the scale of havoc they can wreak on the economy. Scientists warn that storms are increasing in frequency and severity as global temperatures rise. In the US, that leaves coasts at particularly high risk of more flooding, property damage, and unemployment — in addition to life-threatening conditions.
Natural disasters cost $280 billion globally last year, according to insurer Munich Re, with damage in the US accounting for about half that value. Much of it wasn’t insured, leaving the tab to consumers, governments and businesses.
Total insured damages from Hurricane Ian could be as high as $120 billion, according to AccuWeather, whose estimates tend to be higher than other groups. Research firm Enki Holdings LLC boosted its estimated costs to about $71 billion — including lost economic output from tourism and damaged infrastructure and homes — after the storm strengthened towards South Carolina on Friday. Other estimates ranged from $40 billion to $55 billion.
The economic impact filters through damage to properties, crops and transportation infrastructure including airports and roads. After imports were increasingly diverted from clogged West Coast ports during the pandemic, Southeastern hubs including Jacksonville, Florida, and Charleston, South Carolina, now handle more diversified cargo, highlighting how Ian could eventually cause supply disruptions across industries.
Trucking rates are also likely to increase in coming months after falling this year, as tractor-trailers and flatbed trucks redeploy to hard-hit parts of Florida with loads of rebuilding materials, tarps, water and other supplies, said Robert Weist, a vice president of transportation at Crowley Maritime Corp. in Jacksonville.
“It’s going to tighten up,” said Weist, whose company employs 7,000 people and operates its own trucks, vessels and shipping terminals.
Labor markets usually suffer a blow after natural disasters, with thousands of people displaced. When Hurricane Harvey, another Category 4 storm, hit Texas in 2017, unemployment claims in the state skyrocketed by more than four times that year’s average.
Damaged oranges in Florida have farmers preparing for major losses in the state that produces more than 70% of the country’s citrus, with orange juice futures skyrocketing in an industry already facing price crunches.
When it comes to property, more than 7.2 million residences are at a medium-to-high flash-flood risk from the Category 4 storm, according to CoreLogic, with total potential reconstruction costs of about $1.6 trillion.
While local damages mount, the national economy likely avoided the worst-case scenario. Florida is a major producer of phosphate fertilizer, including plants owned by Mosaic Co., which produces about half the country’s supply. A major hit to these facilities would have led to a jump in fertilizer prices and agriculture costs that would have eventually fed through to food prices for consumers.
Ian’s path skirted the area and Mosaic’s early assessments show storm water was well contained.
“We averted disaster to the fertilizer industry with the way the storm tracked,” said Alexis Maxwell, a Bloomberg Intelligence analyst. Spot prices for Florida fertilizer declined in the week leading up to the hurricane’s landing. Farmers usually buy phosphate fertilizer in November, applying the nutrients to prepare for future planting after they’ve pulled corn and soybeans out of the ground.
As of Saturday, ports had reopened, including in Jacksonville, Florida’s biggest container port and a main trade gateway for autos, and Charleston.
Distribution-center operators in parts of the Southeast felt fortunate that Hurricane Ian shifted northward. George Powers, who operates warehouses in Savannah and Charleston, saw little setback.
“We didn’t have any damage and were back up and running today,”Powers, who’s chief executive of TradePort Logistics, said on Saturday.
©2022 Bloomberg L.P.
Securing good jobs, clean air, and a strong economy – Prime Minister of Canada
Autoworkers have been a keystone of the Canadian economy for generations. By investing in the future of the auto industry, we are not only securing good middle-class jobs, we are fighting climate change, and building an economy that works for generations to come.
Since January alone, Canada has secured several historic manufacturing deals for electric vehicles (EVs), hybrids, and batteries – deals that will create and secure thousands of good, middle-class jobs and provide the world with clean vehicles. Today, we are seeing the results of one of those deals start to roll off the line.
The Prime Minister, Justin Trudeau, was joined today by Premier of Ontario, Doug Ford, to open Canada’s first full-scale EV manufacturing plant, General Motors of Canada Company’s (GM) CAMI assembly plant in Ingersoll, Ontario. Starting today and going forward, the plant will build fully electric delivery vans – the BrightDrop Zevo 600 – which will help cut pollution and keep our communities healthy for our children and grandchildren.
Thanks in part to a $259 million investment from the Government of Canada, GM’s CAMI assembly plant was able to retool its operations to build these electric vans. By 2025, the plant plans to manufacture 50,000 EVs per year. This investment has helped secure thousands of well-paying, high-quality jobs across GM facilities, and is helping advance the electrification of Canada’s automotive sector.
The Government of Canada will continue to work to attract investment from companies around the world as we build our EV supply chain – from mining critical minerals to manufacturing batteries, and vehicles. By taking action today, we are positioning Canada as a global leader in EVs, fighting climate change, securing good jobs, and building an economy that works for all Canadians – now and into the future.
“When we invested in GM’s project to build Canada’s first full-scale electric vehicle manufacturing plant in Ingersoll, we knew it would deliver results. Today, as the first BrightDrop van rolls off the line, that’s exactly what we’re seeing. This plant has secured good jobs for workers, it is positioning Canada as a leader on EVs, and will help cut pollution. Good jobs, clean air, and a strong economy – together, that’s the future we can build.”
“Today is proof that our historic investments in EV manufacturing are paying off. With the first BrightDrop vans coming off the assembly line, we’re seeing the skill of Canadian workers making a huge difference as the world moves to EVs. Our government, in partnership with GM, is cementing Canada’s leadership in the EV supply chain.”
“This milestone represents GM at our best – fast, flexible and first in the industry. The BrightDrop Zevo is a prime example of GM’s flexible Ultium EV architecture, which is allowing us to quickly launch a full range of electric vehicles for our customers. And, as of today, I am proud to call the CAMI EV Assembly team the first full-scale all-electric manufacturing team in Canada.”
“This is a very exciting moment – a revolution in the way we transport people and goods. Today marks a huge day for BrightDrop, as we expand our footprint and begin producing the Zevo electric vans at scale, and a huge milestone for Canada on the road to a brighter future. Opening the CAMI plant is a major step in providing EVs at scale and delivering real results to the world’s biggest brands, like DHL Express, who will be our first Canadian customer.”
- The Government of Canada’s $259 million investment supports GM’s more than $2 billion project to reignite production at its Oshawa assembly plant, after operations stopped in 2019, and transform its CAMI assembly plant in Ingersoll.
- The investment is being made through both the Strategic Innovation Fund and its Net Zero Accelerator Initiative.
- The Government of Ontario made a matching contribution of up to $259 million toward the project.
- Founded in 1918, General Motors of Canada Company (GM) is one of the largest automotive manufacturers worldwide. It is headquartered in Oshawa, Ontario, and is one of Canada’s largest automotive manufacturers.
- GM is planning to introduce 30 new electric vehicles by 2025, eliminate tailpipe emissions from new light-duty vehicles by 2035, and become carbon neutral in its global products and operations by 2040.
- The automotive sector contributes $16 billion to Canada’s gross domestic product and is one of the country’s largest export industries.
- The automotive sector supports the employment of nearly 500,000 Canadians.
- The 2030 Emissions Reductions Plan, released in March, puts Canada on track to achieving our goal of cutting emissions by 40 to 45 per cent below 2005 levels by 2030 while continuing to build a strong economy.
- To make zero-emission vehicles more affordable and accessible, the Government of Canada offers incentives of up to $5,000 off the purchase or lease of a light-duty zero-emission vehicle through the Incentives for Zero-Emission Vehicles (iZEV) Program. Since May 2019, close to 176,000 Canadians have taken advantage of this program.
- Since 2015, the Government of Canada has invested $400 million in building approximately 35,000 zero-emission vehicle charging stations across the country.
UK's Economy To Dip Into Recession This Winter – OilPrice.com
The UK’s recession will officially begin this winter and is likely to last for most of next year, a closely watched survey out today suggests.
S&P Global and the Chartered Institute of Procurement and Supply’s (CIPS) final purchasing managers’ index (PMI) measuring private sector activity in November was unchanged at 48.2, the lowest number since January 2021 when the UK was in the constrained by tough pandemic lockdowns.
The reading was below analysts’ expectations but held steady from an earlier estimate. The services PMI was unchanged at 48.8. Services firms generate about two thirds of UK GDP.
The figure prompted experts to predict the forewarned recession will start during the final weeks of this year.
A recession is typically defined as two consecutive quarters of contraction. The UK economy shrank 0.2 percent over the summer.
PMI has slid this year
Source: S&P Global
Britain’s PMI has now been below the 50 point threshold that separates growth and contraction for four months now, indicating consumers and businesses started cutting spending during the summer when the cost of living crisis gathered pace.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said Britain is now in the teeth of the worst economic slowdown outside the Covid-19 pandemic since the financial crisis in 2008.
The economy is being spiked by the worst inflation crunch in 41 years, with prices rising 11.1 percent over the year to October.
Pay is failing to keep pace with inflation, putting households on track for the biggest living standards shock on record. The Office for Budget Responsibility reckons real incomes will fall 7.1 percent over the next two years.
That living standards squeeze is expected to drive a spending slowdown, keeping the UK in recession for at least a year. However, experts think the amount of GDP lost during the slump will be small compared to past recessions.
Businesses are being squeezed by soaring energy costs, forcing them to scale back unprofitable activity.
Gabriella Dickens, senior UK economist at consultancy Pantheon Macroeconomics, thinks businesses will have to shed workers to offset weaker spending.
“Firms will move decisively to reduce employment next year, as they are forced to consolidate costs in the face of higher financing costs and weaker demand,” she said.
The pound slumped 0.34 percent against the US dollar on the news. The FTSE 100 climbed 0.24 percent.
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B.C.’s economy forecast to remain steady, despite slower near-term economic growth | BC Gov News – BC Gov News
Like other jurisdictions, B.C. is expected to see slower economic growth through 2023 because of global inflation and higher interest rates, before steady growth resumes in the medium term, according to projections from private-sector forecasters.
Each year, B.C.’s finance minister meets with the Economic Forecast Council (EFC), a 13-member council of private-sector forecasters from throughout Canada, in preparation for the next year’s budget. This is the second year that an additional set of discussions was added, providing an opportunity to consult with an Environmental, Social and Governance (ESG) Advisory Council to explore how the provincial government can continue to build a more inclusive, sustainable economy and support well-being in British Columbia.
The EFC anticipates the province’s economy will grow by 2.9% in 2022 and 0.4% in 2023; slower than their January 2022 forecasts of 4.2% and 2.7%, respectively. The updated figures are similar to what was presented in the Province’s Second Quarterly Report. Real gross domestic product (GDP) growth is then expected to pick up, with an increase of 1.6% in 2024, followed by gains of 2.3%, 2.3% and 2.1% in 2025, 2026 and 2027, respectively. The reduction in the near-term outlook is consistent with other jurisdictions and reflects persistent global inflation and interest rates rising higher and more rapidly than expected throughout Canada.
“We’re entering this period of slower growth and challenging global economic times in a strong position to continue supporting people, because B.C.’s economy grew more than most last year,” said Selina Robinson, Minister of Finance. “We’ll use the resources we have to address the issues that matter most to people, including housing, health care and building a sustainable economy that works for everyone – but no matter what is on the horizon and no matter what the numbers show, this government will continue to be here to support people.”
Discussions with the EFC and the ESG Advisory Council focused on current events, issues affecting B.C.’s economy and the environmental, social and governance opportunities and challenges facing the province. Topics at the meetings included:
- global inflation and monetary policy impacts;
- government policies to stimulate investment and ensure shared prosperity;
- socioeconomic factors in B.C., such as inequality, Indigenous partnerships, and well-being;
- environment, climate change and the transition to a lower carbon economy;
- housing affordability and supply;
- labour market dynamics and immigration; and
- opportunities for businesses to build on B.C.’s strong ESG profile.
“We are committed to building an inclusive economy, where environmental and social sustainability is the basis for future growth,” said Robinson. “A strong social, cultural and economic foundation is key to successful and resilient communities. We know this, and we know generations will benefit from the decisions we make right now.”
Forecasts and feedback from the two councils will be used to inform the next provincial budget, which will be released on Feb. 28, 2023. EFC members will also have an opportunity to submit revised forecasts in early January.
- In the Province’s Second Quarterly Report, B.C. projected a revised operating surplus of $5.7 billion in the 2022-23 fiscal year.
- Since the summer, B.C. has rolled out approximately $2 billion in affordability measures.
- Environmental, Social and Governance are three main categories often discussed when evaluating sustainability performance, risk-mitigation planning and societal well-being.
To read B.C.’s Second Quarterly Report, visit: https://www2.gov.bc.ca/gov/content/governments/finances/reports/quarterly-reports
For information about new and existing support measures for B.C. residents, visit: https://strongerbc.gov.bc.ca/cost-of-living/
For more about the StrongerBC Economic Plan, visit: https://strongerbc.gov.bc.ca/plan/
To learn about the ways B.C. is committed to environmental, social and governance principles, read the ESG summary report here: https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/government-finances/debt-management/bc-esg-report.pdf
Most B.C. residents under 60 have been infected with COVID-19 or vaccinated: study – Prince Rupert Northern View – The Northern View
Bedard, Fantilli headline Canada’s selection camp roster for 2023 World Juniors – Sportsnet.ca
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