Winners and losers: The business impact of a mild winter
Photo by Istock
Punxatawney Phil’s ‘six more weeks of winter’ prognostication lacked a certain punch this year, given the mild winter weather enjoyed in much of the lower 48 so far. If this is winter, bring it on, many residents are thinking.
As I donned a light spring jacket to run some Saturday errands and bustled out to a car warmed by no more than the February sunshine, I noticed thick green stems poking up several inches from the flower-bed mulch. Daffodils in Detroit! I must get that garden-seed order in soon (and is it my imagination, or did garden catalogues arrive weeks earlier than they used to?) A few minutes later I wheeled past a two small-engine showrooms with forlorn “Great deals on snowblowers” signs; one even had a dozen of the shiny virgin machines parked hopefully on its tarmac.
A weak winter is the best of times and the worst of times depending on one’s line of business. And the presence or absence of snow and cold during the months it’s expected can ripple throughout a regional economy long past the first day of spring. So you might want to take a look at winter winners and losers, and talk to them about the long-range effect of seasonal booms and busts.
For example, sagging snowthrower sales may seem like a trite story angle … till you delve in and realize the lack of commissions means the small-engine sales rep won’t be buying a new car this year, or buying new furniture, or sending a child to camp or college. So for this story, try to go beyond the immediate loss or gain in revenue and find out how that change will affect other businesses and individuals.
According to an EarthSky forecaster, this January was the third least-snowy since 1966. As this Associated Press story, “Balmy weather brings plenty of economic surprises,” mentions, retailers are plagued with excess and profit-eroding investory of unsold winter merchandise – like bulky coats that take up storage space and must be unloaded even at discounts of 70 percent or more. (The AP story is an excellent roadmap of ideas you can apply locally, from airport de-icing services to sales of cold and flu products.)
Electric and gas utilities sales are down as households and businesses demand less heat-producing power — bad for them, great from a personal finance angle.
Where I live, ski resorts recently published an advertising supplement; was it planned or a last-ditch effort to counter unfavorable conditions, I wondered. This report says nationally, lack of snow has – surprisingly - minimal effect on occupancy at resorts due to booking and refund policies; presumably vacationers made plans predicated on normal precipitation. But what are they doing once they arrive? Perhaps spas, retail boutiques, driving ranges, restaurants and other alernatives to the slopes are enjoying some winter sparkle.
Construction employment hit a two-year high in January as the gentle weather kept activity levels high, according to the Associated General Contractors of America. How are remodelers, builders, handymen, fence installers and others faring in your area, and what’s the ripple effect on suppliers, hardware stores and related services?
If you’d rather look further ahead, check on seasonal businesses gearing up for spring. Are pool companies, deck builders, window cleaning crews, patio furniture firms and others gearing up for a jump in business? Are they borrowing more to finance inventory, or hiring additional staff, or otherwise changing from recent years’ business model?
Agriculture is eyeing the 21012 extended forecast, with last year’s drought and flood survivors wondering when and what to plant this year. Are they shifting strategy? What about nursery suppliers – the U.S. Department of Agriculture just changed the plant hardiness zone map that millions of home gardeners use to decide which plants will survive in their yards. This is a fascinating development on a number of fronts – many locales ended up in warmer zones – and probably affects the purchasing and sales plans of regional nursery retailers and wholesalers as well as consumers. It’s hard to go wrong with a business-of-gardening story and this year already is sprouting with many good angles.
Of course, the National Oceanic and Atmospheric Administration site is an excellent resource too but for a different perspective, look into companies like WxRisk.com, which focuses on weather forecasting and commentary aimed at businesses and traders. You’ll gain an idea of why, say, the weather overseas might end up affecting a corn grower in Nebraska or a Texas rancher.
