Tradesmen Blogs

The flooding crisis may have a silver lining for the construction industry and economy in the longer term, according to a leading economist.

Prof Richard Tol of the Economic and Social Research Institute (ESRI) has said that while the flooding has caused widespread damage, there may be an unexpected fillip to the economy once the clean-up operation begins.

“Floods are bad but flood restoration can actually provide a stimulus to the economy,” said Dr Tol. He pointed out in an article in the Irish Times that he was not downplaying the impact the floods had on people who lost their homes and businesses, some of whom were not insured. However, he said that one of the unusual consequences of the restoration work, once it begins, is that it will provide an economic stimulus, generating local work and business in construction, engineering and in retail sales.

Some 1,500 people have been evacuated from homes due to flooding and the insurer Hibernian Aviva has estimated the damage to homes and businesses may exceed €250 million. “What the water has done is it has destroyed many things. But once insurance is paid, there will be a lot of money coming into the country. Most of the funds will come not from Irish insurance companies but will be called in from international reinsurers. So it will be mostly coming from abroad, which is a stimulus.”