UK businesses frozen by cold snaps

They found that since 2005, periods of very cold weather have seen quarterly GDP growth on average 0.6 percentage points lower than typical levels. When minimum temperatures are 1˚C lower than average, quarterly GDP is on average £2.5bn lower. This is a bigger negative effect than any other form of adverse weather, including snowfall, heat waves or flooding.

The fall in GDP results from lower output across a number of industries and lost productivity as transport links and staff availability suffer. Those who do get to work on particularly poor weather days often meet a skeleton staff, hindering productivity.

Whilst cold has the biggest negative effect on the economy, different industry sectors are impacted by different forms of extreme weather. For example, professional services and accommodation and food are the sectors that take the biggest hit from heavy rainfall. High rainfall has a big impact on office-based jobs, with just ten millimetres above average costing the economy £86m in a single quarter. In January 2015 rainfall was 26.5mm above the 2004-2014 January average of 126.8mm – potentially costing the economy £76.3m over the quarter.

ICT sector resilient, but SMEs suffer

The research also explores the resilience of businesses of different sectors and sizes. The information and communications sector is one of the few to see positive growth during poor weather. Cebr concluded that this is because the sector leads the way in using cloud based technology allowing employees to work from home. On average, nearly two thirds (65 per cent) of all companies in this sector use some form of cloud technology compared to just 15-30 per cent of all other businesses.

But the report warns that smaller businesses are at a disadvantage in terms of poor weather, as Scott Corfe, head of UK macroeconomics, Cebr explained, ‘Many small offices are unprepared for such events as they often lack remote access to their work due to security concerns and a lack of infrastructure. This is compounded in many cases by inadequate Internet connections or computing power at staff homes. In addition SMEs (small and medium sized businesses) tend to suffer more than their larger counterparts who can spread the setup and maintenance costs of remote working infrastructure across many more staff.’

The report was commissioned by cloud services company 8×8 Solutions, to highlight the need for businesses to prepare for adverse weather to limit lost productivity.

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