Post-Nisqually Earthquake Survey of Losses and Lessons
J. Meszaros, Assoc. Professor, Business Program
University of Washington, Bothell1

In the week following the February 28, 2001, M 6.8 Nisqually, Washington, earthquake, PEER researchers at the University of Washington conducted a web-based exploratory survey of part-time MBA students working in organizations spread throughout much of the affected region. Other PEER studies are systematically examining targeted neighborhoods and industries where serious damage is known to have occurred. The purpose of this exploratory survey was to draw a general picture of the widespread effects of the earthquake on business in the Puget Sound region. The respondents reported on damage and loss and also on the kinds of lessons they and their organizations were learning as a result of the earthquake.

Nonsturctural damage (fallen parapet) in Olympia, Washington, caused business interruption.

Although the Nisqually earthquake was of considerable magnitude, surface shaking was unexpectedly mild, largely because the hypocenter was deep (52 km). Catastrophic structural failures were not widespread and initial reports included few instances of significant nonstructural damage. This survey confirmed both these expectations. Most respondents reported that their firms had no structural damage at all (68%). Only 11% reported damage serious enough to demand immediate attention. Most respondents reported no nonstructural or contents damage (57%), and only 5% indicated that important or expensive items were damaged. No one in this sample reported extensive contents damage.

Although little damage occurred to buildings and contents, 86% of organizations still experienced some business discontinuity. Forty-seven percent lost 1–4 hours of business, 30% lost between 4–12 hours, and 13% lost more. The discontinuities arose mainly from human reactions and precautionary measures. Employees, customers, and suppliers were simply distracted by the shock of the event and/or were checking their families and homes. Employers were inspecting their buildings and contents to ensure that no hazards were present.

Since the earthquake, some engineers, insurers, and public officials have expressed concern that the surprisingly mild effects of this earthquake may lull Puget Sound residents into a false sense of security about earthquake risks. The survey produced mixed results related to this topic. Respondents were nearly equally likely to conclude (46% versus 54%, respectively) that the earthquake showed that their firms are already well prepared for earthquakes as to conclude that their firms are vulnerable to more serious seismic events and ought to better prepare. On the other hand, the most common primary personal reaction of our respondents (34%) was that the earthquake had increased their awareness of the potential power of earthquakes. Only 11% indicated that Nisqually had reduced their concern about large earthquakes.

An important question is whether organizations in the Puget Sound region will take steps to prepare better for future earthquakes as a result of their experience with this one. The survey results indicate that a relatively high degree of earthquake preparedness is the best predictor of still further preparation: the firms whose employees judged them already prepared better than average before Nisqually also felt them to be more likely to prepare for future events. It may be that organizations have characteristic risk propensities and that these are good predictors of which organizations will heed calls for better preparation. Our PEER work will continue to explore these sorts of questions about organizational mitigation propensities.

The website http://peer.berkeley.edu/nisqually/ provides information on the University of Washington - PEER-EERI Clearinghouse and other efforts related to this earthquake.
1 For a more complete report of the survey design and results, contact the author at meszaros@u.washington.edu.