Snow throws wet blanket on economy
The snow and cold that have pounded transportation systems across Massachusetts and kept people huddled at home away from shops and restaurants has also put a dent in industrial and agricultural operations.
"The primary issues are (that) employees have not been able to get to work in many cases," said Christopher Geehern, of the Associated Industries of Massachusetts. He also said that distribution has also been a problem and snow removal efforts have consumed the attention of industrial businesses.
Geehern said he surveyed members Tuesday, and heard back from 24 companies, including one who wrote, "Production runs being cancelled as employees could not make it into work. Trucks not showing up to pick up or deliver our products."
At the Mystic Generating Station, an eight-unit oil and natural gas power facility on the Mystic River across from Charlestown, the plant put out-of-town workers up in a hotel and provided food, said Kevin Thornton, a spokesman for Exelon, the plant's owner.
"You have to keep these plants running," said Thornton, who said the plant lowered output at times to avoid the risk of snow and ice in the river tripping the plant offline, and workers constantly shoveled the flat roofs on the facility. The plant has about 100 workers, has the capacity to power roughly two million homes, and the biggest costs have been snow removal, Thornton said.
At insurance broker Marsh & McLennan, which has an office in Worcester, workers are seeing claims come in for ice dams that have caused leaking and roof collapses, and Jerry Alderman, president of property and casualty in New England, expects an "uptick" in auto claims.
"Everybody's on standby for some pretty hefty losses," Alderman said. He said insurers will likely take actions to "trigger" reinsurance - which is essentially insurance for insurers. Alderman said brokers help homeowners at risk of a roof collapse, connecting them with contractors to remove snow. The outfits removing the snow are "stretched pretty thin," he said.
A study by IHS Global Insight estimated that a one-day snow-related shutdown in Massachusetts would cost the state’s economy $265 million, though Michael Goodman, an economist at UMass Dartmouth who shared the research cautioned against " any false precision" of the economic cost of the recent snow.
Starting in late January, Massachusetts has been battered by two blizzards and two other major snowstorms that have jammed up roads, buried parking spots and caused widespread service outages on the MBTA, including complete shutdowns.
Goodman said the recent weather could account for several billion dollars of losses in the state's roughly $460 billion-to-$470 billion economy, potentially slowing economic growth in the first quarter even as other economic markers are promising. Goodman said especially cold weather in the first quarter of last year "threw us off our game" and the scale of the recent snow's effect on the economy won't be known until after the quarter ends.
Impassable streets and cancelled transit service has the greatest effect on hourly wage workers and small business owners, while others experience a loss in productivity and "lost personal time" spent traveling to work or out shoveling, Goodman said.
In an effort to boost retail sales and restaurant receipts by extending a big-spending holiday, Gov. Charlie Baker declared this week Valentine's Week. Goodman said that was a "good idea."
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