Economic damage and spillovers from a tropical cyclone

Abstract

Abstract. Tropical cyclones cause widespread damage in specific regions as a result of high winds and flooding. Direct impacts on commercial property and infrastructure can lead to production shortfalls. Further losses can occur if business continuity is lost through disrupted supply of intermediate inputs from, or distribution to, other businesses. Given that producers in modern economies are strongly interconnected, initially localised production shortfalls can ripple through upstream supply-chain networks and severely affect regional and wider national economies. In this paper, we use a comprehensive, highly disaggregated and recent multi-region input–output framework to analyse the negative impacts of Tropical Cyclone Debbie, which battered the north-eastern Australian coast in March 2017. In particular, we show how industries and regions that were not directly affected by storm and flood damage suffered significant job and income losses throughout upstream supply chains. Our results indicate that the disaster resulted in the direct loss of about 4802 full-time-equivalent jobs and AUD 1544 million of value added, and an additional indirect loss of 3685 jobs and AUD 659 million of value added. The rapid and detailed assessment of the economic impact of disasters is made possible by the timely data provision and collaborative environment facilitated by the Australian Industrial Ecology Virtual Laboratory (IELab).