It is no secret that this year’s winter was generous with cold and snowfall. The chain of storms that made its way across the country this winter hit U.S. businesses even harder than the storms hit your driveway — or your heating bill, if your home is not properly insulated. The weather this year caused U.S. businesses to lose $15 billion so far, according to one estimate.
The winter storms resulted in lower retail sales, property damage, lost crops, and a decline in productivity at work. Luckily, the business’ income will pick back up in warmer weather. With this increase, the lasting effects on our $16 trillion economy will be negligible, according to economists.
Chris Christopher is an economist who tracks consumer spending for IHS Global Insight. This company aims to help businesses maximize their results through research and transferring information. Regarding the businesses that the storms impacted this winter, Christopher stated: “if the first quarter takes a little hit there’s going to be some bounce back to make up for it in the second quarter… [and] for the year as a whole this should not have much of an impact.”
For example, car dealerships have taken a big hit this winter, as the inclement weather keeps potential customers from venturing out to the dealership. In January, sales of vehicles and parts declined by 2.1%. Although this may not sound like much, 2.1% translates to $1.7 billion. Economists predict that consumers who were ready to buy a car pre-Polar Vortex will likely return to the dealerships this spring.
Evan Gold tracks the weather’s economic impact for Panalytics, a business weather intelligence firm. He predicts that although some businesses will be able to bounce back from this winter’s losses, others will not be so fortunate. This is where that $15 billion comes back into play. Gold figures that about $15 billion worth of weather-related losses will not be recovered. He figures this to mean that the winter storms have affected about 100 million people, and that 10% of lost business will not be recovered.
This winter, transportation as a whole has taken the biggest blow. The storms have ripped apart railroads and roadways, and airplanes have faced many delays. The delays at the airport have slowed the shipments of goods and raw materials, along with passengers. With a booked air system, any weather delay takes its toll. In January alone, the U.S. airlines cancelled 49,000 flights and had to delay 300,000, according to masFlight.
These delays cost passengers over $2.5 billion, and cost airlines an average of $115 million. Passengers stuck on flights lost their employers billions in productivity. The transportation field suffers, but stranded passengers need a place to stay and food to eat. Hotels and restaurants picked up the passengers’ money to put the cash right back into the economy. In the economy, severe weather damages some businesses, while it supports others. For this reason, the overall economic impact is only a tiny fraction of our country’s economy.
As we reflect upon this stormy winter, consider preparing for next year. While you wait for spring to buy that new car, you can sit in your warm, comfortably insulated home. You can never be too prepared, because we all know that no one can truly predict our New England weather. Be prepared for whatever the weather throws our way.