By Sarah Trefethen
A recent lull in construction means that the New York Metro area has the materials and workers at hand to begin rebuilding in the aftermath of Superstorm Sandy with little delay, according to Ken Simonson, chief economist for the Associated General Contractors of America.
But the disaster will be far from a construction industry windfall, he said, speaking as part of an online forum of economic experts organized by the National Association for Business Economics Tuesday afternoon.
The total value of the infrastructure destroyed by the storm could be as much as $30 billion, according to Gregory Daco, senior principal US economist for IHS Global Insight, who also spoke on the forum.
But it will take time for the money to replace that infrastructure to come forward, Simonson said, and the industry will have to face the reduced demand for construction services as economically impacted companies are forced
to forgo expansion and relocation.
“I think the net impact on the construction industry, even regionally, will be small and, measured over a long period of time, negative,” Simonson said.
“Any time you have a loss of wealth of any kind you’re going to have less overall activity.”
In the more immediate term, he said, it will take time for damage to be assessed, and design and engineering work needs to be completed before rebuilding can begin in earnest.
But when it does, the necessary materials should be readily available, he said, either in current inventory or in the ability of manufacturers to ramp up production of everything from concrete to bulldozers.
“A lot of capacity has been shut down but has not necessarily disappeared,” he said.