by FP Staff Apr 20, 2013 23:45 IST
(Reuters) - As Boston shut down during a day-long manhunt for a suspect in the marathon bombing that culminated on Friday, another cost was added to the human and emotional toll: lost business.
From the postponed baseball game at the Red Sox' beloved Fenwick Park to cancelled classes at Harvard University to empty cubicles at leading fund management firms, the New England city is likely to suffer hundreds of millions of dollars of economic losses for the day people stayed home, according to initial estimates.
"There is an economic cost to the city of Boston in the near term," said David Gergen, a professor at Harvard Kennedy School. He added that the impact would be partially offset when the city resumes its everyday business.
The Boston metropolitan area, which includes nearby Cambridge and Quincy, is the ninth largest in the United States. Its annual gross domestic product is $325 billion, and it produced just under $1 billion in goods and services per day in 2011, according to the most recent data from the U.S. Bureau of Economic Analysis.
That is about 2 percent of the $45 billion in overall U.S. daily economic activity, said Paul Edelstein, director of financial economics at IHS Global Insight in Lexington, a city near Boston.
The total hit from the shutdown could be less than $1 billion, Edelstein said, in part because telecommuting has dampened the impact.
"A lot of work is getting done, some businesses are open and there's going to be a bounce-back from a lot of this down the road," he said, referring to overtime pay for police and other emergency responders working long shifts.
Three people were killed and 176 were injured in Monday's bombings, the worst such attack on U.S. soil since September 11, 2011. In the aftermath, the usually busy Copley Square section of the city of 625,000 was paralyzed as investigators probed for evidence and shellshocked Bostonians and marathoners struggled to make sense of what happened.
Four days later, on Friday, activity in greater Boston ground to a halt as police tracked suspect Dzhokhar Tsarnaev, 19, through the working class Boston suburb of Watertown. Police captured him on Friday night, nearly 24 hours after killing his 26-year-old brother Tamerlan Tsarnaev in a gunfight.
Officials shut mass transit, and Amtrak suspended service between Boston and New York City while the manhunt progressed. Residents were advised to stay put, leaving the city's normally vibrant streets empty.
A slew of concerts and the Bruins hockey game were postponed, while restaurants and shops were shuttered.
Still, at least a few businesses were open, including Yummy House Chinese Restaurant on Beacon Street in Brookline. In Cambridge, near the apartment of the Tsarnaev brothers, Troy & Anthony's Barbershop was packed - in defiance of a police request for all businesses to close.
Boston is rated triple-A by Fitch Ratings, one of three main Wall Street credit rating agencies and analyst Kevin Dolan doesn't expect the deadly events to have a financial impact.
"It's very hard to tell, but the revenue loss to the city, or the economy, is probably close to zero," said Chris Mier of Loop Capital in Chicago.
Harvard's Gergen is convinced the city will bounce back.
"I think there is going to be a silver lining to these terrible days," he said. "I bet next year's marathon draws many more people than this year's." (Reporting by Tiziana Barghini and Hilary Russ; Additional reporting by Herbert Lash; Editing by Lisa Shumaker)
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