Severe snowstorms cost Utah economy $30M, study says


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SALT LAKE CITY — When big snowstorms shut down Utah's roads and disrupt commerce for 24 hours, the economy takes a direct $30 million hit, according to a national study.

"Snowstorms are just incredibly disruptive," said Natalie Gochnour, chief economist with the Salt Lake Chamber.

The study commissioned by the American Highway Users Alliance performed by IHS Global Insight looked at the economic disruption of large snowstorms on 16 states. When a snowstorm hits, clear roads keep the economy rolling. In several states with larger economies than Utah, disruptions can cost $300 million to $700 million for just a 24-hour shutdown.

"When the economy stops, when it snows, people aren't buying things, people aren't traveling, they are not doing things to keep the economy moving," Gochnour said. "So, it's very disruptive and hurtful."

The study shows that Utah suffers a $30.68 million decrease in direct impact statewide for a 24-hour storm that severely disrupts traffic. The study also shows the indirect impact associated with the loss of money adds another $35.68 million decrease from the economy for a total economic disruption of $66.36 million, according to the findings.

Economic impact for Utah during severe storms and road closure:
Wages & Salaries:
  • Direct Decrease: $18.29 million
  • Indirect Decrease: $24.51 million
  • Retail Sales
  • Direct Decrease: $10.12 million
  • Indirect Decrease: $8.14 million
  • Total Economic Impact:
  • Direct Decrease: $30.68
  • Indirect Decrease: $35.36

Snowstorm gridlock leads to reduced consumer spending, lost sales taxes, and disruption in the production and transportation of goods. There are also expenses related to fatalities, injuries and vehicle damage.

The study also shows snowstorm disruptions hurt hourly workers the most, accounting for nearly two-thirds of direct economic losses.

"People who do a timesheet and are paid by the hour and don't get to make up the time, have less money in their wallets," Gochnour said.

A 24- hour disruptive snowstorm also costs Utahns $18.29 million in lost wages and salaries. When workers spend less, that hurts businesses.

"It's our job to keep Utah moving," said UDOT spokesman John Gleason. "It's our job to keep commerce moving. There's a lot of trust placed in us doing that job and it's a responsibility we take very seriously."

Compared to the economic losses from snowstorm disruptions, UDOT's $22.8 million annual snow removal budget looks like a bargain. Each statewide storm costs around $1 million to clear. So far this season, UDOT has spent $10.16 million in snow removal labor, materials and equipment.

A key conclusion in the study says, "The economic impact of snow-related closures far exceeds the cost of timely snow removal. Although states and localities may be hesitant to expend significant upfront resources in the short-term, the long-term payoff more than justifies the expense."

UDOT credits its weather center for helping to minimize economic disruption by helping plow crews work more efficiently, thereby saving on costs.

"They let us know when and where our crews are going to be needed," Gleason said. "So, when a big winter storm hits we are out there."

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Jed Boal

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