Hurricane Harvey’s Potential Impact on Building Materials Demand

Hurricane Harvey has set records for total rainfall and overall damage of residential housing and commercial  buildings. Unfortunately, the total economic impact has yet to be realized but the total damage of Hurricane Harvey is estimated to fall between $70 and $108 billion. Rebuilding will take years, similar to other devastating storms such as Katrina, Sandy and Andrew.

So, what does this mean for the building materials industry? How can suppliers, distributors and dealers support the effort over the longer term? One step is to understand the scale of rebuilding required and have sufficient supply of building materials stocked and accessible to the Houston and Beaumont areas. Principia Consulting has compiled an analysis of the level of building materials inventory that may be needed in each product category for residential home rebuilding.

Overall, there are 1.8 million housing units (single and multifamily) in the Houston and Beaumont Core Based Statistical Areas (CBSA) with an estimated total replacement value of $474 billion. Of course, not every housing unit will require replacement but the total existing housing stock gives pause to consider the overall potential level of building required. The detailed map for these two CBSAs in Figure 1 depicts the relative total replacement value of housing at the county level.