Here's how Hurricane Milton will impact international business

The looming arrival of Hurricane Milton has sparked significant concern in international business, with the Category 5 storm bearing down on a key industrial and export region in the Atlantic. As Milton accelerates towards the U.S. Gulf Coast and Central America, experts predict widespread disruptions in the global supply chain, manufacturing, and energy sectors.

After undergoing rapid intensification on Monday, Milton is expected to make landfall in Florida on late Wednesday evening or early Thursday morning. Described as the “storm of a century,” with sustained winds still registering at 160mph, Milton turned north-east overnight, aiming for heavily populated and highly vulnerable communities. The National Hurricane Center warned that Milton has “the potential to be one of the most destructive hurricanes on record for west-central Florida.” In addition to Florida, multiple areas remain under tropical storm watches and warnings, including parts of Georgia, South Carolina, Mexico, and the Bahamas.

Evacuations were ordered for over 1 million people in Florida’s west coast counties, creating 6-8 hour-long traffic jams and causing 17% of gas stations to run out of fuel. Furthermore, countless businesses have closed ahead of the storm, including major theme parks such as Disney’s Universal Studios and Tampa’s Busch Gardens. Tampa International Airport has also suspended all operations, causing delays and blocking global flight routes, and Miami International Airport has warned a similar shut down. Ports across Florida, including Cedar Key, Sand Key and Key West, were shut down for vessel traffic. CBS reported that the disappearance of cruise ships, a major source of Key West’s tourism, left local businesses struggling to cope with the sudden drop in visitors.

Experts predict that Hurricane Milton could even distort economic data to the point of the United States’ GDP taking a significant hit. Labor markets, clip consumer spending, and food prices are all expected to soar, and unemployment rates due to business closures and shut downs will skyrocket. Global prices could also be impacted, as Florida accounts for 17% of the nation’s citrus production and a small percentage of the global citrus market, with the center of the state serving as the highest-producing region.

When Hurricane Ian struck Southwest Florida in September 2022, the USDA attributed losses of up to 42% of Florida’s total citrus production to the hurricane. Similarly, Milton threatens key agricultural regions in Central America, particularly Mexico and Guatemala, which are major exporters of coffee and bananas. A hit to their plantations during the harvest season could create global shortages, impacting prices and availability in major markets like Europe and the United States.

Beyond the labor-market impact, Milton could lead to an increase in the cost of goods, including energy prices. While most energy infrastructure in the U.S. Gulf Coast is expected to be out of the storm path, the closure of terminals could temporarily disrupt exports and imports. Major energy producer Chevron announced Monday that all staff from its Blind Faith platform on Mexico's Gulf Coast— Chevron's deepest water development in the world— were transported, and the facility had been shut down. Countries like Japan, which depend heavily on imported oil, would likely face rising energy costs as a result, potentially leading to inflationary pressures. 

Hurricane Milton also poses risks for the global insurance industry, incurring losses of up to $100 billion and creating a surge in 2025 reinsurance prices that could boost some insurance companies’ shares, analysts say. Insured losses from Milton could range from $60-$100 billion if the hurricane does make direct landfall in the densely populated area of Tampa; losses of this scale would put Milton on par with the infamously devastating Hurricane Katrina in 2005, which caused the largest insured loss from a hurricane in history.

A hurricane of this magnitude and rapid intensification has not been witnessed in years, reaching atmospheric limits of what the Earth can produce. While devastation is anticipated, the full extent of how Milton will impact the global economy remains to be seen.