DisastersRecord seasonal snowfall caused significant financial losses in New England

Following large snowfall totals this winter, much of New England is now coping with massive economic losses to the regional economy as a result of business closures.

As Insurance Journal reports, every workday lost has meant millions of dollars taken out of the area’s economy. Boston, for instance, has seen 108.6 inches this year, a new record. The disruption of travel, retail, and production due to consumers and workers being trapped in their neighborhoods has led to significant economic losses.
Economic analysis firm IHS Global Insight has estimated that the state of Massachusetts alone suffered roughly $1 billion in lost profits and lost wages following the recent winter storms.

A survey released by Massachusetts business groups representing retailers and restaurants, reported that sales dropped 24 percent and payroll 7 percent following the storms. Additionally, car dealers and real estate agents reported that the snow, which often coincided on weekends, was disastrous for business.

“January and February are always tough months for us because people just don’t want to travel,” said Christopher Crean, the vice president at Peter Pan, a Springfield-based long-distance bus company. “But when you add in all the snow and cold and highway closures, that just compounds the injury. It’s hard to make a profit.”

Many manufacturers report that they will feel the effects for an extended period of time.

“Not only were we losing sales on the front end of the storms, now we’re paying a lot more on the back end to get product out,” said Michael Tamasi, the CEO of AccuRounds, a precision instruments maker. “We’ve been adding hours, stretching out the work day, working on Saturdays, whatever we need to do.”

Most of those affected say that two critical pieces of New England’s infrastructure are most to blame for the disruption of business: the road and transit systems.

“We still have congested streets and longer commutes,” said Timothy Murray, president of the Worcester Regional Chamber of Commerce. “The system has really been no match for Mother Nature.”

Despite this, Doug Handler, the chief North American economist for HIS Global Insight, says that the storms will not be as economically devastating as the more intense polar vortex which brought heavy snow to much of the eastern seaboard the previous winter. Estimates for the total economic impact of that series of storms range from $15 billion to $50 billion.

“This is much more localized and in a region that can handle it, to a degree,” Handler said. “We’re prepared for it in New England, whereas last year, some regions just weren’t.”

Handler also noted that the number of nonagricultural employees which were unable to work because of the current season’s snowfall were roughly equivalent to the monthly averages.

Economists expecti that ripple effects from the New England winter will be felt nationally, but they warn that it is still too early to measure these effects.