Storms and the economy
North Carolina has been hit by a couple of crippling winter storms that resulted in closed schools and businesses, and a disrupted economy. Host Mary Walden asks how much this kind of winter weather has cost us? N.C. State University economist Mike Walden responds.
Mike Walden: “Well, these are numbers that are very hard to nail down Mary. Clearly there are costs to the government in terms of money spent on clearing the roads and sanding the roads and salting the roads etc. Some local governments and state governments have already said they are running low on those funds.
“For some businesses, if they’re selling a product or service that is not replaceable — like a restaurant — people aren’t going out. If the restaurant is closed down and someone goes out to lunch typically to that restaurant, when the restaurant re-opens, they’re not going to order two lunches. They’re still going to order one lunch. So, certain kinds of businesses clearly lose money.
“But other kinds of businesses are able to work around it, particularly now with remote working where you can work on your computer at home. Schedules can be re-worked. Perhaps some factories will put in some extra shifts in order to meet deadlines. So, these kinds of costs are much less, and that becomes more of an annoyance or an inconvenience to the business. Now if we were to shut down the Triangle economy where we live for any single day, and all the economic activity were lost, that would mean about a $165 million of lost economic output. That’s probably not going to happen, but that gives you a marker as to how high the cost would be if it was total disaster.”Category: Economic Perspective