Economy Slammed by Bad Weather [POLL/AUDIO]
Treacherous weather conditions in New Jersey and across the country don’t only have an effect on the roads and schools. Frigid temperatures, and one storm after another, also send a shock into the overall economy.
The harsh weather was the first to be blamed when the latest Pending Home Sales Index offered the lowest figure since October 2011.
“Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes and making offers,” said Lawrence Yun, chief economist with the National Association of Realtors (NAR).
NAR’s Walter Molony noted additional storms and stretches of freezing cold temperatures were also a big problem for the industry in January.
“It may simply postpone some of this until early spring,” Molony said. “But right now it’s too early to tell.”
The drop in contract signings was also attributed to home prices rising faster than income, as well as a lack of inventory.
The retail industry is certainly at the mercy of Mother Nature, as unsafe driving conditions and unbearable cold can make a large chunk of consumers forego a trip to the local mall or supermarket.
The bigger companies tend to include potential weather events in their sales plans, according to Dan Butler, Vice President of Community Integration for the National Retail Federation.
“What I might do as a retailer is – I have the ability to extend my hours on the other days when the weather gets better. I can extend the sales,” Butler explained.
Butler noted if retailers choose to close, they tend to do so at “the last possible moment,” so they don’t cut off service to customers and their employees can still get home safely. A segment of shoppers like to head out during the worst conditions so they can deal with less of a crowd.
The smaller, independent retailers are more vulnerable during major weather events, Butler said.
“They don’t have the financial backing that big companies have,” he said. “They’re not always as equipped to deal with interruption in their business.”