FACT: Business interruption results in $50 billion loss
The economic impact of the earthquake is not limited to the structures and goods broken or burnt in the event.
Much of the economic activity of Southern California will be interrupted by the damage to structures and infrastructure. In particular, beyond their direct losses in stock (such as buildings, machines, and inventory), businesses will be unable to function because of loss of electricity, gas, water and a transportation system.
Some of the losses can be recaptured when the business resumes but the amount recaptured decreases with time as customers and suppliers find alternatives. Because the duration of outage is so long, the lack of water conveyance becomes the largest factor in business interruption losses for the ShakeOut earthquake, resulting in $50 billion in lost economic activity.
Much of the economic activity of Southern California will be interrupted by the damage to structures and infrastructure. In particular, beyond their direct losses in stock (such as buildings, machines, and inventory), businesses will be unable to function because of loss of electricity, gas, water and a transportation system.
Some of the losses can be recaptured when the business resumes but the amount recaptured decreases with time as customers and suppliers find alternatives. Because the duration of outage is so long, the lack of water conveyance becomes the largest factor in business interruption losses for the ShakeOut earthquake, resulting in $50 billion in lost economic activity.
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