American Highway Users Alliance, IHS Global Insight Release Study on Economic Impact of Snowstorms

Sixteen-state study highlights the costly nature of snow-related shutdowns

WASHINGTON, March 30 /PRNewswire-USNewswire/ -- Today, in partnership with IHS Global Insight, the American Highway Users Alliance released a study estimating the economic impact of snowstorms in sixteen U.S. states and two Canadian provinces.  The study found that hundreds of millions of dollars in economic opportunity are lost each day that a state is shuttered by impassable roads.  Further, the study found that hourly workers are the most harshly impacted by such shutdowns, representing America's most economically vulnerable people.

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"Lost wages of hourly workers account for about two-thirds of the direct economic impact of a major snowstorm," said James Gillula, Managing Director of Global Insight and the principal researcher of the study.  "Among all workers, hourly wage workers can suffer the most painful economic losses and the indirect economic effects of their lost wages can ripple through the economy."

The study, the Highway Users noted, gives needed perspective on the true costs of what is often thought of as harmless and fun.  For state and local authorities, they suggested, it could serve as a wakeup call for bigger snow removal budgets.

"Although snow days often conjure happy childhood memories, this study makes it crystal clear that they have a tangible and serious negative impact on real working people and a wide range of businesses," said Greg Cohen, Highway Users President and CEO.  "The shocking losses estimated by this study should light a fire under state and local authorities nationwide to get serious about investing in quicker and more effective snow and ice removal.  When roads are left unsafe or impassible, it is like money being thrown down the drain."

The study further examined the indirect economic impacts caused by snow closures, including lost sales tax revenue and significant losses in the restaurant, general merchandise, and gasoline industries. These indirect impacts more than doubled the initial direct impact of each storm.  For restaurants in the Metropolitan Washington area, economic losses from February's historic blizzard were particularly stark.  "The losses suffered by some restaurants can, and will, define their viability in the very near future," said Lynne Breaux, President of the Restaurant Association Metropolitan Washington.  In a city that was left all but inaccessible for an entire week, recovering from the shutdown was a mammoth task for many Washington businesses.

One particularly painful example of such loss was experienced by Lynn Cook, owner of Parker's Exxon in Northwest Washington. "February's blizzard reduced my business by twenty percent," said Cook. "With operating expenses staying the same, the snowstorm was particularly painful for me as a small business owner."  When the time came to pay taxes at the end of the month, Cook's loss resulted in a reduction of over $6,000 in fuel tax revenue paid to the District government, a vivid illustration of the many crippling external effects dealt by snow-related shutdowns to both business and government.  

The study also reinforced the expensive consequences of pressure faced every day by state and local authorities to cut costs due to declining federal funding.  With six-year transportation reauthorization looming ahead, the Highway Users pointed out, Congress must be exceedingly aware of the myriad economic casualties incurred by its inaction.

"The Highway Users study illustrates an important point:  disruptions in the nation's transportation network are a cost to the economy," said Janet Kavinoky, Director of Transportation Infrastructure at the U.S. Chamber of Commerce.  "In addition to preparing for major events, it is time for Congress to pass comprehensive, fully-funded highway and transit legislation that will address the daily drains on economic productivity that add up to big losses by maintaining, modernizing and expanding the surface transportation network."

States and provinces covered by the study include:

• Illinois, $400 million lost per day
• Indiana, $157 million lost per day
• Iowa, $70 million lost per day
• Kentucky, $96 million lost per day
• Maryland, $184 million lost per day
• Massachusetts, $265 million lost per day
• Michigan, $251 million lost per day
• Minnesota, $167 million lost per day
• Missouri, $162 million lost per day
• New Jersey, $289 million lost per day
• New York, $700 million lost per day
• Ohio, $300 million lost per day
• Pennsylvania, $370 million lost
• Utah, $66 million lost per day
• Virginia, $260 million lost per day
• Wisconsin, $149 million lost per day
• Ontario, $474 million lost per day
• Quebec, $250 million lost per day

The American Highway Users Alliance represents motorists, bus companies, truckers, RV enthusiasts, motorcyclists and a broad cross-section of businesses that depend on safe and efficient highways to transport their families, customers, employees, and products. Highway Users members advocate public policies that improve highway safety and mobility. 

IHS Global Insight provides the most comprehensive economic and financial information available on countries, regions, and industries, using a unique combination of expertise, models, data, and software within a common analytical framework to support planning and decision making.

SOURCE American Highway Users Alliance