November 24, 2012

Sandy's aftermath: Awaiting the economic storm surge

Reconstruction and related spending in the Northeast could total $240 billion.

By JEFF KEARNS, SUSANNA PAK and NOAH BUHAYAR Bloomberg News

(Continued from page 1)

Ray Marten
click image to enlarge

Ray Marten poses by his destroyed home in Queens, N.Y., which burned when Sandy hit the area. Rebuilding is expected to provide the region a huge economic boost.

The Associated Press

MAYOR ENDS ODD-EVEN GASOLINE RATIONING IN NEW YORK

Mayor Michael Bloomberg Friday lifted an emergency order that imposed a 1970s-style odd-even rationing system for buying gasoline and diesel fuel in New York City. The mayor's order became effective Saturday at 6 a.m.

Bloomberg imposed gasoline rationing on Nov. 9 after long lines at gas stations became the norm following post-superstorm Sandy's disruption of the gasoline supply chain in the New York region.

The odd-even system, which made use of the last number of a vehicle's license plate, aimed to cut wait times and reduce price volatility, Bloomberg said.

Gasoline rationing ended at midnight on Nov. 16 on Long Island, as Nassau and Suffolk county executives lifted emergency orders after gasoline lines disappeared.

As of Friday, 85 percent of the gasoline stations in New York's five boroughs were "operational" and the supply was expected to increase, Bloomberg said.

"The odd-even license plate system not only significantly reduced extreme lines, but also eased anxiety and disruptions for drivers at gas stations across the five boroughs," Bloomberg said in a statement. "With more than 85 percent of gas stations now operating -- a substantial increase from just 25 percent two weeks ago -- and Thanksgiving and Black Friday behind us, the odd-even license plate system will be rescinded."

-- The Associated Press

The storm caused more than 20,000 flights to be canceled and left about 8.5 million homes and businesses from South Carolina to Maine without power. In New York, a record storm surge that flooded road and rail tunnels caused the first two- day shutdown of U.S. stock trading for weather since 1888.

With reconstruction underway, companies likely to see immediate sales gains include Atlanta-based Home Depot Inc., the largest U.S. home-improvement retailer, and next-largest rival Lowe's Cos. of Mooresville, North Carolina, said Steve Blitz, chief economist at ITG Investment Research Inc. in New York.

Joe Molaro, owner of Jolad Construction, spent about $500 to buy cement board and adhesive at a Lowe's store in Toms River, N.J. He estimated repairs to his home and two rental properties he owns will total about $120,000.

The rebound after Sandy isn't a sure thing, said Mark Zandi, chief economist at Moody's Analytics Inc. in West Chester, Pa. Economic output initially will slump by about $20 billion because "airlines don't get those flights back and restaurants don't get those meals back," he said.

Next year, "we'll get some of that back as businesses restart like a lot of the manufacturers who shut down, then we have reconstruction and we get most of that back," Zandi said. "Whether reconstruction gets GDP back above where it would have been otherwise depends on the insurance money and government aid and how people use it."

New York Governor Andrew Cuomo is asking the federal government for $30 billion in aid for the third most-populous U.S. state. New Jersey Governor Chris Christie has not yet released a damage estimate. State officials have said they won't be done tallying the storm's damage until next week.

In New York, Cataneo says Gateway Plumbing's first new hire since Sandy started on Nov. 5, and another will join Dec. 5. His co-owner and brother, David Cataneo, said they may need additional help, especially from people with specialized skills, depending on how much Sandy-related work continues to come in.

"When you're dealing with gas-fired equipment, boilers and water heaters and stuff, you really can't hire laborers," John Cataneo said in a phone interview. "You've got to hire people who kind of know their way around the equipment."

 

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