Economic impact of U.S. East Coast snow storm not as bad as feared

The weekend blizzard along the East Coast could have a relatively small economic impact -- up to $850 million, experts estimate -- because the storm hit on a weekend and there weren't any major power outages.

See Full Article

That meant there was little lost productivity in government and business.

Restaurants, theatres, other entertainment venues and some retailers took the brunt of the hit, but overall, the impact might be a wash, said Chris Christopher, a U.S. macroeconomist at data firm IHS Global Insight.

He said that's because many businesses will have made extra money, or at least made sales a little sooner, from people stocking up in advance on food, gasoline, alcohol, shovels, ice-melt and other items. Some spending may just be delayed, like purchases of cars, houses, major appliances and even boots and warm clothing as people realize winter has finally set in. And people whose homes or cars were damaged in the storm will be buying supplies or paying for repairs in the near future.

Other spending likely shifted around. For example, malls and movie theatres were closed over the weekend, but people had other options.

"After they did their shovelling ," Christopher said, "they could be online shopping or ordering movies" via Netflix or cable on-demand services.

Christopher said the economic impact could be as little as $350 million or as much as $850 million, based on the costs of past storms, but hard data won't be available until next month, when various types of economic data for January are released.

Mark Zandi, chief economist at Moody's Analytics, noted airlines and others in the transportation industry lost money, though they expect at least one big storm every winter.

"Winners include those involved in the cleanup, including government workers and private contractors," Zandi wrote in an email.

"If the storm had struck during the work week, it would have done some economic damage," he wrote, adding that the economy of the region affected by the storm produces $16 billion in output per day.

Workers paid by the hour, rather than on salary, will be hurt by lost wages and may have less money to spend, particularly those in service industries who work on weekends. But convenience stores that were able to stay open -- in areas where customers could get to them -- also benefited from having little or no competition.

RETAIL IMPACT

Planalytics, which helps companies assess and address how weather impacts their business, is estimating that retailers could see a net loss of $850 million.

"Some retailers might have seen a bump just ahead of the storm, but this will be more than offset by the fact that two weekend days of business were washed out or significantly slowed due to the storm," according to its president, Scott A. Bernhardt.

Bernhardt noted that nationwide, sales of coats, hats, gloves, scarves and boots were all up by about one-fourth last week because of the cooler weather then, after an unseasonably warm December. Meanwhile, some lost retail sales will be made up later, he wrote, but not all of them.

"You don't eat dinner out twice next weekend because you didn't have your usual Saturday night out or buy two cups of coffee because you missed your regular daily stop one day," he noted.

For instance, in Washington, D.C., most neighbourhood Starbucks and Dunkin' Donuts outlets were still closed Sunday afternoon.

TRANSPORTATION

Businesses involving transportation were mostly shut down over the weekend, but were getting back on their feet late Sunday. The top four airlines, which handle more than 80 per cent of U.S. air traffic, resumed at least some service Sunday afternoon and were aiming to be nearly at a full schedule Monday.

However, that wasn't looking likely in a few areas, particularly the hard-hit Washington, D.C., region.

Because the airlines waived fees for changing flights, some people travelled earlier than planned. Others pushed back their trips, meaning flights early this week are likely to be even more packed than usual.

Amtrak was operating Sunday on all its routes, but with a reduced number of trains. It will continue a modified schedule between Boston and Washington Monday, with reduced service between Washington and points in Virginia. Other service between Washington and the Southeast and Midwest remains under review.

DELIVERY SERVICES

UPS, which has limited deliveries on Saturday and Sunday, had operations interrupted in Washington, D.C., and parts of 13 states: Connecticut, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia.

UPS spokesman Steve Gaut said it will restore pickup and delivery service Monday where streets have been cleared, adding its teams were assessing road conditions and implementing contingency plans to help ensure shipments arrive quickly as conditions permit. Monday's deliveries would be processed in its hubs and package centres Sunday evening.

FedEx said in a statement that it will provide service in areas that are accessible, but that customers may experience delays in areas still affected by the snowfall.

FINANCIAL MARKETS

All Nasdaq U.S. markets will be open and operational for normal hours on Monday.

The New York Stock Exchange did not respond to an inquiry on its schedule Monday.



Advertisements

Latest Economic News

  • Climate change, rail talks bring opportunities to Churchill

    Economic CTV News
    CHURCHILL, Man. - A northern Manitoba community on the shore of Hudson Bay is having an identity crisis. The port of Churchill was once bustling with ships laden with grain bound for markets. Now, the ships docked at the port are bringing essential supplies in rather than transporting anything out. Source
  • NAFTA's open borders mean Canadian exporters are caught in trade war crossfire: Don Pittis

    Economic CBC News
    Soybean farmer Philip Shaw is suffering from the effects of the North American Free Trade Agreement. Ironically, as U.S. President Donald Trump threatens to up the ante with China, the NAFTA deal that he has called "the worst trade deal ever" means Canadian exporters like Shaw are suffering the backwash from sanctions never intended for them. Source
  • How the Ritchie brothers turned a business headache into a massive opportunity

    Economic CBC News
    Ritchie Bros. Auctioneers is a global corporation and a Canadian business success story, but it started off as a used furniture shop with a big problem: The bank had called in a $2,000 loan. It was the 1950s and the three Ritchie brothers — Ken, Dave and John — had taken over the family furniture store in Kelowna, B.C. Source
  • Ottawa fails to secure new buyer for Trans Mountain pipeline by deadline

    Economic CTV News
    OTTAWA -- The federal government is set to become the official owner of the Trans Mountain pipeline expansion after failing to quickly flip the project to another private-sector buyer. Pipeline owner Kinder Morgan had been working with the government to identify another buyer before July 22. Source
  • Ailing auto CEO Marchionne had multiple roles, no script

    Economic CTV News
    MILAN -- Sergio Marchionne's achievements as one of the automotive world's most charismatic chief executives include the bold trans-Atlantic merger of Italian carmaker Fiat and U.S. No. 3 Chrysler after he restored both to health. Source
  • 'Worse than oil': Sask. farmers say Husky downplaying damage from salt water leak

    Economic CBC News
    The Saskatchewan farming family that owns the land where salt water leaked from a Husky Energy line says the company is "underplaying" the damage. Ken and Nick Wourms have released aerial photos that show yellowed trees and vegetation in what appears to be the path of the leak, which spilled salt water into the Englishman River, about 500 metres from the leak site near Turtleford, Sask. Source
  • CMHC moves to make it easier for self-employed to get a mortgage

    Economic CBC News
    Self-employed Canadians seeking to buy a home may soon find it easier to secure a mortgage after changes announced by Canada Mortgage and Housing Corp. CMHC said self-employed people make up about 15 per cent of Canada's population, but they may have difficulty qualifying for a mortgage because their incomes may vary or be less predictable. Source
  • Investigating sales tactics and condos rush to ban weed: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Don't panic. CBC's Marketplace rounds up the consumer and health news you need. Want this in your inbox? Get the Marketplace newsletter every Friday. Telecom sales tactics Have you ever felt pressured by employees selling TV, internet and wireless services? The CRTC is inviting you to raise your complaints online or at a public hearing starting Oct. Source
  • Pipeline protesters to hold news conference after eviction notice

    Economic CTV News
    BURNABY, B.C. -- Protesters at an anti-pipeline camp in Burnaby, B.C., are set to hold a news conference to relay their side of the story this morning, instead of complying with an eviction notice handed down by the city. Source
  • Pipeline protesters defy city-issued eviction order, say they'll meet with officials

    Economic CTV News
    BURNABY, B.C. -- Protesters at an anti-pipeline camp in Burnaby, B.C., say they will meet with officials to discuss safety measures, but will not comply with a city-issued eviction order. The City of Burnaby says there are safety concerns surrounding "Camp Cloud," including a two-storey watch house and a fire that the protesters describe as sacred and ceremonial. Source