Washington Business Journal
By: Andy Medici
The massive blizzard bearing down on Greater Washington could dump up to 30 inches of snow across the area — and inflict millions of dollars in economic losses.
A Pennsylvania business weather intelligence company pegs the economic damage from this storm at $350 million to $700 million across the Northeast U.S.
It would be easy to assume the massive amount of extra bread, milk and toilet paper stripped from local grocery stores in advance of any storm would offset any potential economic damage, but unfortunately it doesn’t. Those are more than offset by lost productivity and lost consumer spending.
The damage bad weather inflicts on the economy is real. In the winter of 2013-2014, a series of severe snowstorms helped shrink the national economy by 2.1 percent in the first quarter of 2014.
Maryland could take a $183.5 million economic hit in the event of a wide-ranging snowstorm that shuts down local roads, according to a 2014 study by research firm IHS. Virginia’s total economic impact could be around $256 million, according to the same study, which did not include the District. But the final tally could be bigger or smaller depending on a variety of factors.
The losses can be broken down into three broad categories:
Payroll: Many workers — especially shift workers at restaurants, bars, venues and even in many offices — either see their workplaces closed or are unable to get there because of a storm. But for many there is no vacation time to take, so the wages are simply lost. While some might make it up in overtime later, the majority simply don’t get paid.
Productivity: Even for people who can get to work, productivity suffers. It’s harder to make a product or perform a service when other people are out, supply chains are disrupted and local (or federal) governments are shut down. Since there is only a finite amount of time in our linear universe, that productivity is hard to make up.
Consumer/retail spending: Someone interested in buying a car won’t be dissuaded from buying one forever because of a snowstorm, they will just wait. But the many small items people buy while they are out add up, and that revenue for businesses is lost. If you normally make a coffee run in the morning and get snowed out, you wont be making two coffee runs the next day to make up for it.