Industrial Production Likely To Take Hit From Katrina

U.S. industrial production, which includes manufacturing, mining and utilities, will likely take a negative hit from Hurricane Katrina in September as did in August, believe the economists at Merrill Lynch & Co., New York. The main reason: disruptions to energy production.

But as strange as it may seem, the damaging August storm may actually boost third-quarter GDP growth. Rebuilding efforts are a major factor. Merrill believes they'll add about $40 billion to inflation-adjusted GDP growth. Higher net exports are likely to figure in as well.

More On Hurricane Katrina

See IndustryWeek's Hurricane Katrina News & Resources section for more on coverage and how companies are responding.
However, Merrill suggests the net positive effect on GDP may be one of the smallest numbers ever -- about $12 billion -- as energy-supply disruptions are as much as a $30 billion drag on growth.
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