Like the loss of human life, the toll on the U.S. economy and on manufacturing is still being counted more than a week after Hurricane Katrina roared across the waters of the Gulf of Mexico and into the Gulf Coast of the United States.
Some early economic assessments are decidedly optimistic. "While the full impact of Hurricane Katrina will take some time to sort out, we believe the U.S. economy has the foundation to weather the storm," judges Martin Regalia, chief economist of the U.S. Chamber of Commerce, Washington, D.C. "While the near-term negative regional economic impact in the wake of Hurricane Katrina could be quite noticeable in upcoming monthly national economic data, substitution to alternative vendors and rebuilding some of the damaged structures should increasingly counter the initial negative national economic effects," says UBS Securities LLC, New York. Indeed, for now UBS is not reducing its inflation-adjusted GDP projection for 2006 from about 3%.
At the same time, the hurricane at least temporarily disrupted transport on the Mississippi River and in and out of the Gulf -- and barges that carry bulk commodities are missing. "All of this is potentially a problem for manufacturing. Coal is one thing. [And] moving bulk commodities like steel or raw materials could be impacted," adds Duesterberg.
But even as damages are still be assessed, some production capacity is returning is returning along the Gulf Coast. For example, DuPont & Co.'s Burnside, La., and Mobile, Ala., plants, two of five company sites affected by the hurricane, are now back in operation. ExxonMobil Corp. expected to be moving the maximum amount of crude oil through its Baton Rouge, La., refinery by day's end on September 4 -- and to have the refinery's gasoline production rates at maximum as well.
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