By: Patrick McGeehan, NY Times
Virtually shutting down the entire New York City metropolitan area for a blizzard that flaked out was a costly decision, but it will not have a lasting effect on the region, economists said on Tuesday.
With the highways and transit systems closed overnight, most of the usual commercial activity in and around New York City ground to a halt on Monday and only gradually returned on Tuesday. Most of a day’s output — the goods and services produced — was skipped as workers hunkered down at home, having been warned that it might take two days to dig out from a storm that was forecast to dump more than two feet of snow on the city.
But after those predictions proved overblown for the city, economists said the impact would be minor. Much of the lost activity could be made up in the next few weeks as residents caught up on missed shopping trips and work overtime to complete assignments, they said.
“All in all, the storm’s a nuisance, but it’s not an economic disaster,” said Ryan Sweet, director of real-time economics for Moody’s Analytics. Mr. Sweet said that the metropolitan area contributes about 8 percent of the nation’s gross domestic product, or about $5.3 billion a day in economic activity. With the roads and subway systems having reopened early Tuesday, less than a full day’s productivity was lost, and much of what was lost “will be made up in subsequent weeks,” he said.
Some businesses, including restaurants and theaters, will not be able to recoup their losses. But some of that spending would have shifted to other businesses, such as grocery stores and providers of home entertainment, said Evan M. Gold, a senior vice president at Planalytics, which measures the effects of weather on consumer demand.
“I have three kids home from school today,” Mr. Gold said. “Maybe they’re watching an on-demand movie. I’m sure we’re spending money on things that normally we would not have made a purchase of today.”
Planalytics estimated that the storm wiped out about $500 million in sales in the Northeast that will not be recovered. At least half of that would have come from New England, where the storm was most severe. Only about one-third to half of that total would have come from the New York City area, Mr. Gold said.
Mr. Gold said he could not venture a guess about the share of that loss that could be attributed to the decisions by Gov. Andrew M. Cuomo of New York and Mayor Bill de Blasio of New York City to shut down the subway and commuter lines Monday and to order everyone off the streets.
A study released last year by IHS Global Insight estimated that a one-day shutdown caused by a snowstorm would cost New York State $700 million and New Jersey $289 million in economic activity. Most of that loss would be from wages of hourly workers and the forgone spending of that income, the study said.
The effects of the storm that swept up the East Coast on Monday night left large swaths of both states unscathed. Not so for the public images of Mr. Cuomo and Mr. de Blasio, who were the targets of a lot of criticism on social media for overhyping the hazards of the storm.
But other city officials were more forgiving. Ronnie Lowenstein, the director of the city’s Independent Budget Office, said the shutdowns “look like a mistake because the storm didn’t materialize as the National Weather Service predicted.” But it was a less costly error than the underreaction by the administration of former Mayor Michael R. Bloomberg to a snowstorm on the day after Christmas in 2010. “The risk of being wrong is extremely costly if the storm were anywhere near as big as forecast,” Ms. Lowenstein said.
Scott M. Stringer, the city’s comptroller, said “the impact of any limited weather event on the economy of the city is generally small and transitory.” Some working people may lose wages, he said, “but the vast majority of our city’s economic activity — real estate transactions, retail sales and other consumer spending — either continues on as normal or is just displaced to another day. Money not spent today is eventually spent.”