NYC economy lost $200M from fizzled storm, transit shutdown
Jan. 28, 2015
NEW YORK (AP) — New York City lost an estimated $200 million in economic activity in the fizzled snowstorm and decision to shut down the transit system — a loss that wasn't crippling overall but had the biggest impact on small businesses and hourly workers.
Consumers who would have otherwise bought cars or made other major purchases will likely do so a day or two later, said Adam Kamins, an economist with Moody's Analytics, which came up with the preliminary loss estimate. He noted that many employees forced to stay home Tuesday were able to telecommute.
"For example, a holiday where people aren't working would have a greater impact on the economic output than this storm," Kamins said.
Evan Gold, senior vice president for Planalytics, a firm that advises companies on weather issues, estimated the economic losses for the total Northeast, including New York, Philadelphia and Boston, at $500 million.
"Now that does sound like a lot of money, but when you think about last year, where we had a polar vortex, several weeks of that, more population centers impacted as well as above-normal snowfall, last year's overall economic impact is pegged at anywhere from $15 billion to $50 billion," he said. "So in comparison, this is actually a relatively small event."
In New York, small businesses and hourly workers who rely on tips, such as taxi drivers and restaurant workers, were keenly affected by the loss of work time.
Lenice Ferguson, a baker at Insomnia Cookies said the shop is usually open until about 3 a.m. making deliveries. The bakery closed at about 10 p.m. Monday.
"It's a big deal, because I only work three nights out of the week," the 26-year-old said. "My check is going to be short, and I have bills that I have to pay."
Subways, rail lines, bridges and tunnels were all closed Monday night. Residents were told to stay off the streets after 11 p.m. or face fines. Transportation reopened Tuesday morning after it was clear the storm was a bust in New York City, with most areas getting about 8 inches instead of the predicted 2 feet.
Fausto Cabrera opened his Upper West Side barber shot Tuesday morning but wasn't expecting many customers.
"There was nobody here yesterday and today, just look," he said, pointing to six empty barber chairs. "All I can do is wait."
Mayor Bill de Blasio said economic loss was much less than it would have been had the storm hit in full force, and that taking precautions helped the city get back online faster.
Moody's economist Kamins said that for the Northeast overall, the storm would have done about $16 billion in damage had it hit full force. Instead, the impact will likely reach just $1.25 billion.
"I will always err on the side of safety and caution," de Blasio said Tuesday. "We had consistently been getting reports talking about two feet or more of snow. To me it was a no-brainer, we had to take precautions to keep people safe."
Shaon Chowdhury, a manager of Arthur Cab Leasing Corp., in Queens, said he didn't have a problem with the city's actions even though he lost about $60,000 in revenue and expenses.
"If they did get 28 inches it would be a problem, so shutting down is a good idea," he said. "What happens if we did get 28 inches? It would have been hell."
New York City's 24,000 restaurants probably lost millions in revenue in total, said Chris Hickey, regional director of New York City for the New York State Restaurant Association.
For the first time in the decade since it first opened a block north of Times Square, the TSQ brasserie deserted at mid-afternoon Monday. Business was down about 70 percent.
"Never in my life was it like this — empty," said manager Mohi Hassan.
Associated Press Writers Karen Matthews, Verena Dobnik, Deepti Hajela, Jake Pearson and Jonathan Lemire in New York, Kathy Matheson in Philadelphia and AP Economics Writer Christopher S. Rugaber contributed to this report.