“How about this weather we’re having?” “Can you believe how cold it is?” “The weather made my commute just brutal today!” Weather dominates small talk in the United States, and there has been a lot of research done on how weather influences behavior and emotions. But, weather also has strong financial impact; it is estimated that nearly 20% of the U.S. economy is directly affected by the weather, and it impacts the profitability and revenues of many industries, including agriculture, energy, events, construction, travel and others. In a 1998 testimony to Congress, former commerce secretary William Daley stated, “Weather is not just an environmental issue, it is a major economic factor. At least $1 trillion of our economy is weather-sensitive.”
This regular column will focus on business and its relationship with weather. Our economy is dependent on weather, and increased weather volatility has forced businesses to be more proactive in including weather insights into operational planning. As weather-forecasting technology continues to improve, businesses are finding it easier to be more proactive in making decisions related to weather.
Of the more than 10,000 practicing meteorologists in the U.S., there is strong representation in the private sector. A meteorologist may be found in a variety of positions, ranging from weather forecasting duties, to non-forecasting roles like sales, marketing and business analytics. The job outlook for meteorologists is estimated to grow by 12%, which is almost 40 percent faster than the national average.
Public safety is a very visible example of weather forecasting for business. But there are many other ways weather plays a role in business. For some companies, it’s about risk management. For retailers, meteorologists help develop strategies that address how weather impacts purchasing trends. Meteorologists can help with business planning and developing strategies for expansion geographies. The impact of weather on business is real, and as forecasting and other technology continues to evolve, the weather-based decision making within business will also evolve.
Top of mind for so many folks right now is winter and safety, particularly as yet another storm rolls into the northeast. Severe weather will impact flights, road traffic, agriculture, the delivery of energy and the general safety of the public. When thinking about the current winter conditions and the impact on traffic and road conditions, it’s expected the plows will keep the roads clear, but there’s a lot of planning needed, not only to effectively keep the roads clear, but to also effectively manage budgets. In Minnesota for example, Anoka County is responsible for keeping 1,100 lane miles of roads clear with the work of 40 full-time, and 20 on-call, maintenance workers. These crews rely on the accuracy of each weather forecast and a big benefit of leveraging those forecasts is the effective use of budgets. Anoka County weather forecasts have specific pavement forecasts, which help the team schedule crews appropriately. The county is required to give night crews a 24-hour notice, and those crews are paid a premium rate for working after hours. Having an accurate forecast helps the department avoid scheduling workers for night shifts unless it’s necessary, ultimately protecting the bottom line.
Pavement forecasts also help the department use other resources efficiently. When freezing rain is predicted, it uses this information to help determine the optimal time to salt the roads, in turn, avoiding unnecessary applications. The department also knows the best time to pretreat roads, allowing it to avoid sending out a second shift which increases safety for everyone on the road. As this story from Anoka County, Minnesota, shows, there are real economic implications to everyday weather events.
[“source=forbes”]
The stock market is ending the year on quite the ugly note. Here is where we stand statistically: