As the incoming winter blizzard of 2017 is set to wreak havoc in cities such as New York and along the Eastern seaboard, paralyzing transportation and preventing millions of people from attending school and work, the economic impact is predicted to be insignificant.
While meteorologists have estimated there could be as much as 18 inches of snow that will accumulate from Stella, the major nor'easter, the effects can range from "pretty small to downright devastating," said Patrick Morris, CEO of New York-based HAGIN Investment Management.
While March remains a relatively light period of shopping for consumers, the impact for the retail industry is likely to be nominal or a 0.27% negative contribution to sales.
"Since all days are not equal in retail, it will have a slightly higher impact on travel and logistics companies and a lower impact on clothing stores," he said.
With the storm making landfall in the Northeast, there is "no real impact" on construction or housing starts either, Morris said.
"There should be almost no real impact in terms of the economy," he said. "I would be more concerned about flooding and weather impacts from the California winter rain and spring melt-off."
The lack of employee productivity on the economy will also be trivial.
"It should be quite small and I think that when you run the numbers, it might slightly reduce productivity" Morris said. "Again, it is likely to be only a fraction of a percent."
The real impact is felt by restaurants because the revenue can not be generated during another period, said Greg McBride, chief financial analyst for Bankrate, a New York-based financial content company.
"The missed business is gone," he said. "Retailers will often see the business impact pushed to another day, but not if substitute items can be found online. The aggregate economic effect is inconsequential. Its winter. It snows. It happens every year."
The impact to some regions might be more significant if they reallocated resources for other projects, believing that the worst of this year's winter had already occurred.
"A big blizzard can wreak havoc on city and state government finances if they were underbudgeted for snow removal or have somehow reallocated those funds in another way thinking the risk of a winter storm had diminished," McBride said.
Although the Northeast blizzard will definitely put a damper on mobility in the region for the next several days and disrupt it as flights are canceled, roads impassable and rail service delayed, "business activity will slow markedly," said Bernard Weinstein, an economist at Southern Methodist University's Cox School of Business in Dallas.
The long-term economic impact of the snowstorm will remain negligible since cleanup costs will also be a small percentage of gross state or regional output.
"Most workers will continue to receive paychecks even if they can't get to their places of employment," he said. "Business activity that is lost during the blizzard will be recovered later as flights and hotels will be re-booked, meetings will be rescheduled and construction activity will resume."
One unintended consequence is that hotels and restaurants on the East Coast could generate additional or unplanned revenue from travelers who are stuck in these cities, Weinstein said.
Large snow storms are inconvenient and expensive for the business, employees and customers since access becomes an issue, said Bud Hammer, president of Atlantic Westchester, a Bedford Hills, N.Y.-based heating, ventilation and air conditioning company.
"In the event of a bad storm, field technicians who don't get to work need to take either a vacation day or choose not to get paid for the day," he said. "Some of our office employees can work from home, but it doesn't apply to all of them and it's hard to keep track and maintain fairness. A lot of snow or ice is also a problem that prevents us from accessing equipment that's either on a roof or in normally out-of-the way areas near a building that don't get plowed or shoveled."
While many industries will not be impacted long-term, other businesses such as Broadway Stages, which operates a full service production facility for TV and film in New York City, will have to allocate more funding.
"For the most part, our employees are in on snow days and are assisting with cleanup," said Gina Argento, CEO of Broadway Stages. "Since many of the areas that we operate in such as Brooklyn and Queens are on the bottom of the list for snow removal, we find it important to take the lead and clean things up ourselves. We have our own plows and snow removal equipment."
Many of the shows that film at their facilities will be shut down for at least one day. When certain prime time shows film in local neighborhoods in NYC, they are employing 200 to 300 workers per show for each day, she said. The shows spend $50,000 to $250,000 for each episode on location rentals such as coffee shops, fronts of people's homes and small businesses.
"This stoppage alone is cutting away thousands of dollars from the local communities around our facilities," said Argento. "With the anticipated storm looking to be very bad, we don't anticipate shows getting back out into the community for two to three days, unless they are looking for very specific snow scenes."