If someone from Boston tells you that a year’s winter is the worst he’s ever seen, listen to him, because he’s seen (and shoveled) a lot of them — and that’s the way the winter of 2015 is getting described thanks to nearly 7 feet of snow in a little over a month, bitter cold in between, and so many days off from school and work that a February school vacation week even started to lose its appeal.
As further evidence to those who want to make the case of how bad this winter is, economic data suggest that this winter could cost the economy nearly $2 billion in lost GDP, according to research firm Planalytics — and winter has about a month more to go officially. This would be largely caused by retail losses from having to close because of weather conditions, re-routed travel patterns, public transportation that might not be running at full capacity until Easter, as well as other business headaches.
More importantly, such a downturn can have yearlong ramifications. Last year, the Polar Vortex of 2014 (or as it’s known in Boston — the Montreal Express), cost the economy over $15 billion, leading to a GDP contraction of 2.1 percent in the first quarter of the year. According to market analysts, that downturn dented GDP growth for the rest of 2014.
Despite that, there is cautious optimism that America won’t suffer the same fate, according to CNN Money. Even threats of blizzards can cast an economic toll. The (first) blizzard of 2015 cost New York City $200 million and resulted in the closure of the subway system, despite only getting 6 inches of snow (if only Boston was that lucky). Also, thanks to ATMs, banking can still take place when the branches are snowed in, as they were during the blizzard of ’78, a storm by which all subsequent blizzards are compared in the Northeast.
Initial estimates show GDP increasing by 3 percent this quarter, and with lower gas prices, the blow to consumers is cushioned slightly. On average, drivers will save close to $750 this year thanks to the gas price drop, and could spend that boosting the retail industry, even though recent Commerce Department reports haven’t shown the savings translate into increased spending.