The impact of Atlantic hurricanes on business activity

This paper quantifies the short-run economic impact of 21 Atlantic hurricanes on U.S. local business activity from 2017 to 2024 using anonymized Mastercard transaction data aggregated by ZIP code. On average, hurricanes reduce merchant sales by 12.4 percent during the preparation, impact, and recovery phases—an estimated US$1.38 billion in lost revenue per storm. Substitution in spending across nearby areas or large online platforms is limited, indicating widespread local consumption declines. Economic disruption varies more by industry than storm intensity, with independent stores hit harder than chains. Local businesses with larger online presence face smaller, shorter sales declines, showing greater resilience.

The results reveal that variation in the economic impact of hurricanes is more pronounced across industries than across storm categories or firm types. Hotels and gas stations often demonstrate more resilience and, in some cases, temporary boosts in demand. Gas stations likely benefit from the increase in sales as people prepare for potential evacuations. For hotels, this may reflect a complex interplay of canceled reservations and increased demand from displaced residents or emergency workers. In comparison, restaurants, retail, and home improvement stores experience the most severe and prolonged effects. These industries often experience anticipatory store closures, temporary power outages, inventory spoilage, or supplychain disruptions.