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Iselle had minimal economic impact

Isles likely escaped major losses compared with previous calamitie

By Andrew Gomes

POSTED:
LAST UPDATED: 02:02 a.m. HST, Aug 09, 2014


What was once Hurricane Iselle became a "minimal" tropical storm Friday as it brushed Oahu, and minimal also is about how much impact the weather system was expected to have on the state economy.

To be sure, parts of Hawaii island suffered some significant damage, but much of the state Friday reflected a sort of Christmas or Thanksgiving atmosphere where many retailers were closed and most people were off work and at home.

"This storm's impact was negligible in terms of anything that would be material in a macroeconomic sense -- tourism, reconstruction, foregone economic output, etc." Paul Brewbaker, principal of local consulting firm TZEconomics,said in an email.

"There was no substantial damage that would not have been associated with a vigorous tropical storm cell or a bad Kona storm," he added.

On Hawaii island, county spokesman Kevin Dayton said damage assessment teams had not reported in as of Friday afternoon, while only a handful of homes reported damage. It could take weeks before any estimated cost of storm damage is calculated.

Some idea of the magnitude of economic impact from Iselle may be gleaned from past events. For instance, a pair of earthquakes off Hawaii island in 2006 damaged an estimated 2,000 homes, numerous businesses and public facilities including highways and harbors.

One early damage estimate was pegged at more than $200 million.

At just one business, Kamuela Liquor Store, the shaking earth eight years ago sent bottles crashing to the floor and destroyed $127,000 worth of inventory. Bigger impacts included a two-year closure of the Mauna Kea Beach Hotel because of quake damage.

There were no similar reports of destruction from Iselle immediately after its passing. There were power outages Thursday and Friday, but it's doubtful they created major economic loss.

By comparison, a 1991 blackout covering all of Oahu triggered by a fallen tree and a line out for maintenance lasted up to 12 hours and reportedly caused $75 million in economic losses.

On Friday, Hawaii Electric Light Co. reported that fallen trees knocked out transmission lines and power that remained cut off to an estimated 17,000 customers in mainly rural areas of Hawaii island.

Maui utility crews worked overnight Thursday and were able to restore electricity to all but about 250 customers of roughly 8,000 who lost power because of Iselle.

Hawaiian Electric Co. on Oahu said power outages affected about 6,000 customers, and as of about 1:30 p.m. Friday, service had been restored to all but 1,500.

There was lost productivity -- but not income -- from most government workers who were asked not to come to work Friday because of the safety issue and paid as if they did work.

Emergency responders, however, likely racked up significant overtime. After a tsunami scare in 2010 created by an earthquake in Chile, local county governments reported spending an estimated $763,000 in overtime wages and other expenses.

Most businesses and government entities including schools made decisions Thursday to close Friday out of caution, though some enterprises reopened early Friday on Oahu as Honolulu Mayor Kirk Caldwell said Iselle had become a minimal tropical storm.

Kahala Mall, which was closed Friday, announced that Whole Foods Market opened at 7 a.m. L&L Drive-Inn announced at about 11 a.m. that most of its stores were open.

Oahu's two largest malls, Ala Moana Center and Pearlridge Center, remained closed Friday.

The disruption in shopping for one day is not viewed as a major impact, as many consumers who may have shopped Friday will likely just visit the mall another day.

There was some bump in spending leading up to Iselle's arrival -- especially for water, food, batteries and gasoline -- though economists generally view that as being offset by delayed future purchases or returns.

"Essentially what people did is they filled up gas in advance of when they normally would fill up, and they cleared out emergency supplies in local stores,"Lawrence Boyd, an economist at the Center for Labor Education and Research at the University of Hawaii at West Oahu, said two years ago after an earthquake off British Columbia prompted a local tsunami warning and evacuation of coastal areas statewide.

Brewbaker said the same was true with Iselle. "Most of those things ... are a wash, people speeding up or deferring their work,"he said. "It's all shape-shifting, in terms of quantitative impacts."






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