A study of the 2008 flood and storm related disasters in Iowa has found the economies of the hardest hit communities weathered the devastation relatively well.
Iowa State University economist Dave Swenson, who co-authored the report, says he assumed he would find significant disruptions to business production in places like Cedar Rapids, Iowa City and Waterloo/Cedar Falls.
“But what we found, in the main, was that the disruptions to the state’s economy were relatively brief and not long-lasting,” Swenson said. Swenson is quick to acknowledge that many Iowans were devastated by flooding, tornadoes and other weather-related disasters in 2008.
But, he says the study found the economies hit the hardest by the destruction were large and diverse enough to absorb the blow. “The areas that were damaged were not the core drivers of their economy – the rest of that regional economy in Cedar Rapids, Iowa City, Black Hawk County and those areas continued running quite fine,” Swenson said.
I.S.U. economists did not find evidence of net population loss in flooded communities or higher unemployment rates than would be expected in a recession. Swenson says federal and state disaster relief funding of roughly $2.5 billion created economic activity and helped fuel consumer spending in those flooded counties.
“Although we know there were reductions in productivity in the region, after the rest of the year played itself out, the high impact counties actually posted gains in retail sales over the same quarter the previous year,” Swenson said. The study concludes the disaster relief dollars also helped sustain thousands of jobs.
Swenson says the report shows the FEMA and state funding likely supported 16,700 jobs in the first year and 14,350 in the second year of recovery. Swenson believes similar economic trends will play out in the state’s most recent flooding because state and federal disaster relief funding has been made available to households and businesses.
See the full report here: www.econ.iastate.edu/sites/default/files/publications/papers/p11867-2010-08-23.pdf