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Like Hugo, Andrew Is Expected to Cause a Boom, Then a Bust

August 28, 1992

COLUMBIA, S.C. (AP) _ Hurricane Andrew’s devastation at first will mean an economic boom in hard- hit areas, then a bust, say economists who studied Hugo’s aftermath in South Carolina.

″If they are not careful, they’ll say the economy is great, business is booming. Then all of the sudden everything will drop off,″ Douglas P. Woodward, an economist at the University of South Carolina, said Thursday.

Hurricane Andrew has left hundreds of thousands homeless in Florida and Louisiana and caused damage estimated at $20 billion to $30 billion in Florida alone. In South Carolina, Hugo in 1989 left 29 dead and $5.9 billion in damage.

A report by USC’s Business School concluded that Hugo added $360.6 million to South Carolina’s construction industry in the 1 1/2 years after the hurricane, primarily from a flood of reconstruction work.

″You can’t ever think that disaster is a good thing because it creates jobs, but that’s what it does,″ Woodward said. ″It’s like a God-given make- work project.″

On the other hand, construction work that would normally have been done two or three years down the road is completed right after the hurricane, leaving an ″aftershock″ of inactivity later, Woodward said.

South Carolina budget forecasters got caught in the trap, he said. They painted an overly rosy picture of the state’s revenue collections. This year, reality set in and the state has cut its budget by $202 million.

Woodward said Florida’s agriculture is likely to rebound more quickly than South Carolina’s timber industry, hard hit by Hugo.

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