Business

The Impact of Weather on Business: How It Affects Performance

The impact of weather on business is vast, wide and in many ways, all encompassing. However, in order to briefly explain how weather conditions can directly and indirectly impact the performance of businesses both nationally and internationally, we will discuss the broad genres of construction, manufacturing and retail today.

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Construction

Construction is one of the biggest industries in the US, given that it’s share in the country’s GDP exceeds 6%. Outdoor construction in particular is heavily impacted by even the minutest of weather changes, particularly when it leads to rain, snow, storms or extreme dips in mercury. In addition to shutting down work indefinitely, an unexpected natural calamity can cause huge financial losses for construction businesses. Apps for weather forecasting by AerisWeather specifically cater to this problem by providing job site-specific forecasts and customized weather alerts. Given the API’s wide usage and customizability across various other industries (energy, property management, recreation, insurance, agriculture, transportation, etc.) that are impacted by weather changes, it has established itself as an effective method to avert weather related business disasters as best as possible, through advanced planning.

Manufacturing

Manufacturing in general suffers greatly from bad weather conditions because it often leads to supply chains being blocked by snow, rain, storms and other unfavorable weather conditions. Planes cannot fly in or out during storms and railway tracks and highways often get blocked by snow during the winter or even flooding on rare occasions. It was recorded back in 2014 that the automotive industry was hit particularly hard due to the year’s infamous winter. General Motors saw a decline of 12% in sales, while Ford’s sales went down by 7.2%. It is important to understand that the effects of severe weather conditions in any part of the world can directly affect the manufacturing industry within the United States because it’s a global business. For example, if bad weather impacts Asia adversely, it is inevitable for the manufacturing industry in the US to suffer losses due to that, because that part of the world acts as both a supply hub and a manufacturing hub for much of the western world.

Retail

If the manufacturing industry cannot produce the goods for the retail industry to sell, it would be impossible for the retail industry to turn a decent profit. This is the basic rule which applies here and although retail doesn’t seem to be affected directly by severe weather, this is what causes retail to lose money during bad weather. However, there is another aspect to it as well. It has been seen that when weather conditions take a turn for the worse, customers are less likely to make purchases of any kind, which is another significant and direct way in which weather affects retail offline. The fact that nobody really wants to plough through snow or get wet in the rain for shopping is a more obvious and direct adverse effect of bad weather on the offline retail business. The online retail industry on the other hand, has consistently seen a boom during bad weather conditions in particular.

While weather cannot be controlled to any significant degree at the moment, the technology is already there to predict it well in advance. It makes sense to use that technology and plan according to the forecast with the goal to minimize the impacts of harsh weather conditions on business in any sector.

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