I think it's also important to note that the economic footprint of the affected area is relatively small compared to the overall size of the U.S. economy. So I think it's important that since we haven't seen disruptions in energy and transportation and because of the limited size of the affected area, we do not see the Gulf oil spill as having significant impact on the national economy. And, in fact, to that end, we haven't altered our outlook for the U.S. economy because of the oil spill.Michael Chriszt, assistant vice president in the Atlanta Fed's research department responsible for the Regional Economic Information Network, along with Susan Remy, a Regional Economic Information Network analyst from the Federal Reserve Bank of Atlanta's Birmingham Branch, discuss (13 minutes) the BP oil spill in the Gulf of Mexico and its impact on regional economies.
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As far as tourism goes, the amount of cancellations that hotels and rental properties have received over the past couple of months has really accelerated because, well, people had genuine fear that there was going to be oil on the beaches of places they intended to vacation to. So there were a lot of cancellations over the past couple of months, really start[ing] in June and into July and also into August. Even though the oil didn't affect very much of the Gulf Coast, we did see cancellations going all the way down to Southwest Florida.
That said, when we take a step back and think about—again, turning back to your original question about what are the national implications—we saw an increase in tourism activity and bookings and visits to other areas in the Southeast that weren't affected by the spill, especially along the eastern coast of Florida. Even reports from Tennessee and the mountain vacation areas saw an increase in activity. And, anecdotally, they told us that a number of their guests had said that they had planned to go to the Gulf Coast but decided to go elsewhere. So, the overall national effect on tourism, I think, was partially offset by the fact that people simply chose to take vacations elsewhere.
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Another point that the scientist I was speaking with this morning brought up was that the natural system is very resilient. He gives 80 percent of the credit to the natural system and not necessarily the actions that have been taken.
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Census Bureau data tell us that there's roughly an estimated 8,000 people employed in this industry along the affected coastal communities. In addition, the National Marine Fisheries Service reports that roughly the same amount of people—8,000—are employed in fish-processing plants along the states bordering the Gulf. So, it's a small industry when you look at some of the larger national numbers but still very important to some local communities.
The fact that two-thirds of the Gulf remains open to fishing, I think, is a positive sign. Basically, that means that not all of those jobs have been immediately affected. Some waters off the coast of Louisiana have been reopened recently, and some recreational fishing areas previously closed have opened up as well. I think the primary risk factor going forward is the potential destruction or contamination of fish, shrimp, oyster stocks, and the possibility that operations can be limited for several years. And our contacts in the scientific community tell us that this is probably going to be the case, that we're going to see a couple of years until there is full rehabilitation of the stocks that were affected.
Our contacts inform us that the overall impact of a reduced Gulf seafood supply will be felt mainly in restaurants, but not so much in grocery stores, more broadly, as really only about 1 percent or so of the seafood sold nationally through these outlets comes from the Gulf of Mexico.
Read a partial transcript of the podcast interview here.
Click here to listen to the 13 minute podcast about the economic impact of the BP oil spill on the Gulf Coast region.
The previous June 2010, Atlanta Fed podcast about the economic impact of BP Deepwater oil spill is available here.
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