2018 fall, winter weather expected to drastically influence consumer spending in US

Mark Puleo # weather

Every year, the weather plays a crucial role on consumer spending habits. The third and fourth quarters of 2018 will be two of the most weather-influenced quarters in recent history, according to AccuWeather models.

AccuWeather began projecting weather influence on sales in 2006. Weather influence is the difference in predicted sales after factoring in weather impacts. For example, without weather factors, economic models are predicting $1.57 trillion for retail food sales during quarter three, which spans from July to September, but after factoring in weather AccuWeather is predicting sales of $1.39 trillion.

That difference of $182 billion, or 11.59 percent, is the weather influence dollar amount.

In the food retail sector, the weather was found to have a 10.7 percent negative influence on national retail food sales during quarter two, from April to June, which translated to a $186 billion drop-off from expected sales. This was largely due to the presence of summer droughts and wildfires, particularly in popular farming regions.

Meteorologists expect severe weather in many regions around the country during the fall, AccuWeather Lead Long-Rage Meteorologist Paul Pastelok said. Regarding the food industry, Pastelok mentioned droughts in the Southwest as a specific factor behind the negative weather influence.

“There will still be problems in central and Southern California as far as drought with the wet season starting late, but rainfall is possible by late in the quarter to improve conditions,”
Pastelok said.
“[However] there is not a lot of cold weather expected to build up quick in Canada which means the chances of early freezes or frosts to damage crops affecting food is not apparent at this time.”

Pastelok also added that the arrival of El Niño could also play an important role in minimizing the chances for tropical impact. El Niño brings notable changes to weather patterns throughout the world and occur approximately every two to seven years.

If quarter three has a negative weather influence, it will mark the fourth straight quarter in which food retail sales number were hampered by environmental factors. From the third quarter of 2012 until the third quarter of 2016, the food retail industry endured 17 consecutive quarters with a negative weather influence.

Shoppers struggle with their carts amid a snowstorm in Philadelphia. (AP Photo/Matt Slocum, file)

Meanwhile, in the building and garden equipment sales industry, the opposite has played out. The AccuWeather model predicted a positive weather influence in quarter three and quarter four, similar to the prior two quarters in 2018. This would mark the first calendar year of four positive weather influence quarters since 2007.

The weather in quarter three is projected to boost sales from quarter two by $341 billion. Specifically focusing on national garden sales shows an expected increase of $6 billion from a 6 percent weather influence. The AccuWeather model also predicts a positive 5.21 percent weather influence in the fourth quarter of 2018.

“Periods of mild weather and less rainfall from the Northeast toward the Great Lakes and Ohio Valley is possible to help with the building sector,"
Pastelok said.
“Extended nice weather toward the typical start of cold season can help those catch up on projects delayed by the wet summer.”

Shoppers carry bags as they cross Market Street in San Francisco, Friday, Nov. 25, 2016. (AP Photo/Jeff Chiu)

Pastelok also added that the arrival of El Niño could bring milder winter weather to the East and Gulf Coast, lowering the chance of heavy snowstorms, and thus, potentially dampening fourth quarter sales for businesses relying on selling snow-related products.

"[A] mild December may have negative impacts on sales for winter products, snow mobiles, shovels, snow blowers in Ohio Valley, Northeast and mid-Atlantic,"
Pastelok said.