The true cost of snow
Last year, snow cost our country £1billion a day. The figure came from the founder of the Centre for Economics and Business Research (CEBR), who suggested that our gross domestic product (GDP), which is the total value of everything produced in the country, would be cut by 20% because of snow, even after mitigating circumstances (such as online shopping and working from home) were taken into consideration.
Certain industries definitely bear the brunt of bad weather; construction workers are a prime example of people whose work can come to a complete standstill in severe weather conditions.
The construction sector is one of the largest in the UK economy – employing 3.1 million people or over 9% of the workforce, and it is watched by the Bank of England for hard facts on what is happening at grass roots level in the economy.
With a sector that large, it’s easy to see how even one day of high winds, ice or snow can make an impact on the economy. When the Beast from the East snowstorm swept over the UK in March 2018 for example, the snow had a particularly heavy impact on civil engineering projects, according to the survey of more than 170 construction firms. The fall in civil engineering activity, which includes work on roads and bridges, suffered the biggest monthly downturn in five years.
But civil engineering is not the only one of our heavyweight industries to be directly affected by bad weather. Retail remains the single largest private sector employer in the UK, with one in 10 people working in retail, and annual sales totalling £358billion.
Winter weather conditions can cause shoppers to stay indoors, meaning less footfall on an already-struggling High Street, right at the most important time of year for many UK shops. When winter weather makes it harder to get to the shops, people necessarily turn to online shopping. Having shopping delivered still depends on transport routes being clear of course, and last year saw online retailers everywhere extending their anticipated delivery times.
While there’s no doubt that snow has the potential to cost our economy a huge amount, the fact is that the figures used in our headlines are really just educated guesses. For example, we know travel and transport is hampered by the snow, which causes significant problems for commuters, families, goods and services – but how do we measure it?
Importantly, the loss is often not permanent. In fact, what wasn’t so widely reported last year was the same CEBR economist that made the £1billion claim (which he himself called a “very rough estimate”) also forecast that quite a lot of these losses will have been made up by the end of the first three months of the year. But that doesn’t make such a good headline.
The Cost of Snow: to the Individual
Of course, we measure the cost of snow on a personal level. Snow may have cost the economy millions or billions but the real cost to us will more likely be measured in our personal expenses.
The cost of a lost day’s work varies from one person to the next, but few of us can afford to take too many unplanned days off work. And there’s the risk of a ‘snow day’ at school, meaning a panic trying to find last-minute childcare, or taking another day off work.
Extremely cold weather means that the heating is on more, especially on those days where we need to stay in the house. Winter always means making sure we have warm clothes and boots – and if you have growing children this can mean having to buy new items year on year. Cars should also have winter safety checks and possibly snow tyres.
These costs soon add up, and so it is always advisable to plan for winter and the extra, known expenses it will bring.
For those unexpected expenses, it’s always best to have an emergency account, or a ‘rainy days savings account’. If you’re interested in finding more information about how much to save and the best type of savings accounts for this purpose, you can read an earlier article we produced here.