Boston's Knowledge Economy Resilient To Snowstorm ImpactPlay
Much of the nearly nine feet of snow that has already fallen on Boston is still piled up, disrupting traffic and commerce.
But it might surprise you that the record storms are not expected to contract the economy as much as the severe cold did a year ago.
Superstitious Bostonians might want to blame their weather woes on Patrick Renna, CEO of local burrito chain Boloco. Back in January, he was forecasting strong growth at a company board meeting.
"And I remember the chairman asking me, ‘So, Patrick, what’s the biggest risk?’ And I said, ‘Weather.’ And I remember saying, ‘But thankfully, we’ve been good so far,'" Renna said, laughing. "And then two weeks later started the 102-inch snowfall that we’ve received since then. So maybe I jinxed it."
If he jinxed it, it cost him. Boloco’s sales fell 20 percent last month. Many of the company’s stores are downtown, serving people working in office buildings. The stores were closed for days.
"In my 20 years of business, it was the worst restaurant month that I’ve ever been involved with," Renna said.
The Retailers Association of Massachusetts says many of its members are "taking a very large hit to the bottom line." Unlike sales of something you were going to buy anyway, like a new refrigerator, which may just get delayed, those burrito sales are gone for good.
"You’re not going to sell two lunches tomorrow to offset the lunch that you didn’t sell today," said Michael Goodman, an economist at UMass Dartmouth.
But just because workers did not come into their Boston offices as much to grab a burrito for lunch, it doesn’t mean their business is down 20 percent, too.
"I worked from my desk in my living room," said Amanda Schreyer, an attorney at the Boston law firm Prince Lobel Tye. The snowstorms kept her from going to the office. But they didn’t keep her from going to work.
"I have a laptop. I can connect remotely to my work system," she said. "It was really business as usual."
The firm’s managing partner, Craig Tateronis, says billable hours were down 10 percent last month. But he’s not too stressed about it.
"We certainly understand why we have the result we do in February," he said. "But we also expect that we will get the productivity back."
Tateronis says his lawyers and paralegals can make it up by working longer hours and coming in on weekends. And that’s the case for many companies affected by the snowstorms, says Doug Handler, chief U.S. economist at the research firm IHS Global Insight in Lexington.
"We’re lucky that Boston is, for the most part, a knowledge-intensive city," Handler said. "And actually the permanent economic loss because of that really isn’t that significant."
By knowledge-intensive, he means financial services firms, universities, computer software companies — places that can make up the work later. When Handler’s team came up with their estimate of the permanent economic loss from the snowstorms, they did it from the comfort of their homes.
"Depends on the time of day, but we start with hot chocolate for sure!" he said.
The estimate? The permanent loss to the Massachusetts economy is just over $1 billion. It’s not chump change. But annualized, that’s just a percentage point off the regional output. That’s a pretty good outcome, considering how much snow still blankets the region.
This segment aired on March 6, 2015.