This blizzard may land a $3 billion blow
The economic impact of last week's blizzard, which dumped more than two feet of snow in parts of the Northeast, stranding thousands of travelers and closing schools throughout the region today, packed a mighty economic punch. Economists, some of whom have revised their estimates higher, figure the cost at between $500 million and $3 billion.
They're basing their forecasts on different economic models that yield different projections, not uncommon when they try to asses complex macroeconomic trends. They stressed that these figures are preliminary and could be subject to later revisions for seasonal adjustments, among other reasons.
But they all agree that the economic hit would have been far worse had the storm occurred during the work week. Moreover, the power outages weren't as widespread as with many other powerful storms, which constrained some of this one's economic impact.
"We need to see how things shake out," said Ryan Sweet, an economist with Moody's Analytics, in an interview. Moody's forecasters see the blizzard's financial impact coming in at between $2.5 billion to $3 billion.
Planalytics, which estimates the impact of weather on business, puts the storm's cost at $850 million, the higher end of its earlier range. It raised its forecast for the New York City area from $70 million to $230 million because the region got so much more snow than expected.
Economic forecasters at IHS Global Insight see the impact at between $500 million and $1 billion, compared with earlier estimates of $350 million to $750 million. National Weather Service Executive Director Louis Uccellini has said the blizzard could easily cause at least $1 billion in damages.
Reinsurance broker AON Benfield puts the costs in the multibillon-dollar range. The company added that it was too early to provide more precise numbers, though it did note that a similar storm in 1996 caused a $4.6 billion economic loss.
"Right now, we aren't committing to any one number," said Chris Christopher of IHS Global Insight. "That would be foolhardy."
The blizzard was one of the worst the region has experienced since 1900, affecting as many as 85 million people. It began Friday and ended last night, pounding the East Coast with record snowfalls in some cities along with sleet and severe thunderstorms. At least 29 people were killed and dozens were injured.
Damage reports included burst pipes, collapsed roofs and fallen trees. Towns in the Southern part of the New Jersey shore reported the worst flooding they had seen since Hurricane Sandy. Some motorists were stranded on the Pennsylvania Turnpike for more than 24 hours.
Among the sectors that were hardest hit are restaurants, which count on weekend traffic from patrons. That lost business isn't going to be made up on another day. Transportation is another loser, given the weather-related delays in delivering goods. Moreover, more than 13,000 commercial airline flights were canceled, which wound up affecting air travel around the country.
Potential winners from the blizzard include home and garden supply stores such as Home Depot (HD) along with apparel retailers that have been stuck with a glut of winter merchandise that has already been marked down considerably due to the unusually warm weather earlier in the season.
People with cabin fever were probably relieving their boredom by shopping online, which could boost e-commerce sales, according to IHS' Christopher.