Northeast Indiana’s economy was virtually frozen in place Monday as banks, factories, clinics, universities and government offices closed because of the weather.
But how individual sectors were affected by the unscheduled day off varies, according to economists.
Fort Wayne’s metropolitan statistical area averaged $52 million a day in sales and economic activity in 2012, according to data from the U.S. Bureau of Economic Analysis. The local MSA includes Allen, Wells and Whitley counties.
Despite the many closings Monday, local economic activity didn’t flat-line, especially when several days’ worth of sales are considered, economists said.
At least one retailer saw a record-setting surge.
Kroger’s central division, which includes most of Indiana and parts of Illinois and Missouri, rang up its highest sales ever Saturday, spokesman John Elliott said. The division was created decades ago, he said, long enough to have tallied sales from dozens of Thanksgiving, Christmas and Easter feasts.
Even so, a Ball State University economist doesn’t expect retailers to make a lot of green from the knee-deep white stuff.
Michael Hicks, director of the Center for Business and Economic Research at Ball State, said the two-day burst of sales that retailers and restaurants experienced has been followed by two days of little or no activity.
For most of those businesses, he said, The impact will balance out in a few days to weeks, without lasting effect.
Ellen Cutter, director of IPFW’s Community Research Institute, agreed. Net sales differences will be limited, she said in an email, because the gusting snow and low temperatures will last a relatively short time.
Consumers who had planned to make larger purchases will put off shopping for a few days, but the weather is not expected to sway spending patterns greatly one way or another, she said.
Elliott, the Kroger spokesman, said company data show that sales tend to even out when a one- or two-day storm scares away shoppers.
Even so, logic leads him to believe that with more people eating at home instead of in restaurants, families might spend a bit more on groceries this week and last than they otherwise would have.
In Elliott’s case, his wife sent him out the door Monday morning with leftover quiche for breakfast and fried chicken for lunch. Typically, Elliott, who lives and works in the Indianapolis area, would have gone out rather than packing food from home.
Retailers weren’t the only ones affected by Monday’s cancellations. Many of the region’s offices and factories were closed. But Hicks and Cutter see that economic activity balancing out in the long run as well.
Commercial damages from severe winter weather are typically minor, Hicks said.
Factories and logistics operations often add production time over the following few weeks to make up the orders, he said.
That might or might not be a good deal for workers, said Tom Lewandowski, president of the Northeast Indiana Central Labor Council, AFL-CIO.
Most hourly workers won’t get paid for the lost day unless they take vacation or personal time, he said.
Or factory officials could decide to run production lines on Saturday, giving workers a way to reach 40 hours this week, Lewandowski said. Although it might interfere with workers’ personal plans, it would allow them to save personal time for other uses while still getting paid, he said.
Lost wages can have a significant effect on economic activity because consumer spending accounts for an estimated two-thirds of the U.S. gross domestic product. GDP is the value of all goods and services produced in an area.
Hourly workers in offices and retail stores also face the prospect of losing pay or using vacation time.
Tellers, personal bankers and other support staff at iAB Financial Bank must make that choice after the Fort Wayne-based financial institution closed its 17 branches Monday.
Karen Cameron, iAB’s executive vice president for corporate services, said concern for the safety of the bank’s customers and almost 300 employees prompted the decision to close.
The increasing popularity of online banking means fewer customers were disrupted by the decision, she said.
Rules are typically different for the salaried staff. That’s true at iAB, Kroger and numerous other local workplaces.
For office workers, the work doesn’t go away, it just piles up, Ball State’s Hicks said. So, my (office) is closed, but we’ll either work from home or put in a few extra hours this week to catch up.
Hicks said the storm’s biggest financial burden likely will fall on governments and property owners.
Road crews will devote significant amounts of man-hours, fuel and other resources to clearing roads and rescuing stranded drivers, he said.
Property damage could also be high, Hicks said.
I am sure hundreds of automobiles and commercial vehicles have been damaged or destroyed throughout the Midwest, he said. Depending on how extensive loss of power is, the cost of frozen pipes could easily run into the tens of millions of dollars.
Indiana Michigan Power has reported limited power disruptions, which are all expected to be restored by today, spokesman Tracy Warner said in an email.
The cold weather does increase demand on our system, but I&M has enough capacity to serve all of our customers, he said.
Even with heat, some homes could sustain damage from heavy snow accumulation on their roofs, Hicks said.
Ultimately, Hicks said, the storm could cause tens of millions of dollars in damage statewide.