Information gathered by the Federal Reserve Bank of New York’s Research and Statistics Group shed some light on the effects of the hurricanes of Fall 2017 on the economy of the U.S. Virgin Islands, including the statistic that the territory lost 4,500 jobs in the wake of the hurricanes.
That figure accounts for a 12 percent job loss between August 2017 and November 2017, before and after Hurricanes Irma and Maria. As of May 2018, only about 600 of those jobs had returned, leaving many people out of work and many companies still struggling to get back to pre-hurricane levels.
This means the economy in the territory suffered a more significant blow from the storms of 2017 than it did from other major storms like Hugo (1989) and Marilyn (1995), though not as severe as other areas have suffered from other storms, such as New Orleans from Hurricane Katrina in 2005.
In addition, while Puerto Rico has received more headlines in the continental United States for its disaster relief efforts and humanitarian crises in the wake of the storms, the economic effect was actually substantially more severe in the U.S. Virgin Islands. Puerto Rico suffered half the job loss percentage that the Virgin Islands did, and has reversed half of that job loss already.
This can be explained in part by the geography of the territories. Almost everyone in the Virgin Islands lives within several miles of coastline, compared to Puerto Rico, where many settlements are in the mountains that are miles away from the shore. This means that while job loss might not have been as severe in Puerto Rico, people were more cut off from utilities, transportation and communication, which made for a greater disruption of everyday life
Tourism hit hard
Still, the economic effects of the storms were far more severe in the U.S. Virgin Islands, mostly because of the territory’s dependence on tourism. Puerto Rico has a much more diversified economy, with tourism accounting for only about two percent of its total economy versus about 13 percent in the U.S. Virgin Islands.
Predictably, the storms devastated tourism in the territories. Few people want to visit an area that has suffered significant storm damage, is without many basic utilities and is focused on rebuilding its infrastructure and buildings.
Before the hurricanes, there were about 600,000 to 700,000 cruise ship visitors to the territory in a given four-month period. However, from September to December 2017, only 241,000 passengers arrived on cruise ships, which made for a 57 percent drop from the previous year.
The economy in the U.S. Virgin Islands continues to rebound, but it will be a long, slow journey to get back to pre-storm employment and earnings. For more information about how your company can continue to recover, contact a corporate planning attorney in the U.S. Virgin Islands.
Tom Bolt is Managing Attorney of BoltNagi, a full service business law firm located on St. Thomas, VI.