Construction costs have been outpacing headline inflation by a huge amount. This has accrued to costs of repairs easily exceeding 20-30% over a few years ago.
I’ve been curious myself to the economics of construction. Wondering if there’s a cool place where this type of stuff I broken down, otherwise I’m having a hard time believing some of these estimates.
Anecdotally my homeowner's insurance increased 34% from last year. When I talked to the underwriters about the huge jump I was told that it was due to the increased cost of rebuilding associated with inflation.
> Losses from severe thunderstorms have steadily increased by 7% annually in the last 30 years. 2023 marks an increase of almost 90% compared to the previous 5-year average (USD 32 billion), and more than doubles the previous 10-year average (USD 27 billion).
Most economic growth are not in assets that can experience physical damage, or not without very widespread or global devastation.
Exponentially growing economic losses thus implicate exponentially more violent weather. And exponents have a way of growing from curiosities to existential threats overnight.
Thunderstorms damage things like house cladding, roads, and water and power infrastructure. Things built 20+ years ago. Inflation is a reasonable control since it may make the repairs more expensive.
The stock market is not a reasonable control because it is related to the production of these assets. Production that is delayed and smoothed over decades.
The news isn't the dollar amount, but the amount of claims relative to other disaster types. The story is that due to climate change, thunderstorms are causing a higher share than in years past. (Presumption being that all claim types are affecting by inflation in the same way)
It is actually straightforward to obtain dollar amounts from the claims. Past few years have seen an uptick in single natural disasters causing more than a billion dollars in insured losses.
Can this be correlated with amount and severity of thunderstorms? You know people will just say it is because of aging infra and blame the big government
Not necessarily. Hurricane debby currently affecting Florida is a cat 1 storm with only 80 miles max wind. But it's still bringing devastating flooding and storm surge damage.
Yes so specific stats about how much more bad weather/thunderstorm there is is what I meant. Otherwise people will just say more damages is because of that bad infra.
Urban development, wealth accumulation in disaster-prone areas and inflation are key factors at play, turning extreme weather into ever rising natural catastrophe losses.
"Since 1990, the toll of disasters as a proportion of the global economy has gone down from about 0.25% of GDP to less than 0.20%. That is good news and indicates progress with respect to the goals of the Sendai Framework."
This is very misleading. The damage should be proportional to the relevant parts of the economy, rather than as a proportion of the total. Especially keeping in mind that certain parts of the global economy are essential (like agriculture) and others less so.
For example, suppose in year 1800 or whatever, 20% of some region's economy is agriculture. Drought occurs, and food production goes down by half. So gdp goes down by 10%.
In 2024, agriculture is 4% of the economy. Drought again kills half the food production. GDP goes down by 2%.
You can't lump all of agriculture together as essential. A huge amount of the GDP in agriculture is in cash crops such as nuts. A drought wiping out all the almond production would be a disaster for almond farmers but not for food security. A drought wiping out half all grain production would be a food security disaster, however.
So instead of achieving full employment by paying people to dig ditches and then fill them up again, we create the climatic conditions for nonstop disasters and then clean up and rebuild after them.
Think of how rich the glaziers will be, replacing all those windows damaged in storms! That sector of the economy will surely be a source of infinite wealth!
Does anyone else's neighborhood get flooded with contractors and other roofing/repair companies every time it rains or the wind blows? Sarcasm aside, it seems to be a regular scam where they try to talk you into colluding with them to bill your insurance company for "damages". They get a big check and you get a "free" new roof or basement or whatever.
I wonder why the article separates thunderstorms and floods. This year, my area has experienced a very unusual amount of localized flooding caused by thunderstorms.
