North's mild winter gives a glow to economy

Without a flake of snow on the ground, Sherman, Conn., is saving money on sand, salt, and overtime pay for its snowplow crews.

Thanks to the East's warmer weather, hybrid automobiles in the region are getting better gas mileage.

In Tewksbury, Mass., Hinckley Brothers, a construction company, was still ordering concrete this week because the ground had yet to freeze.

The mercury finally took a plunge Wednesday in the Northeast, reminding everyone that groundhogs and tulips are a long way from surfacing. But with almost half of the winter season over, the balmy temperatures over the past two months are expected to give the entire US economy the equivalent of an invigorating trip to the tropics – as much as a 0.5 percent boost to the gross domestic product in the winter months, economists estimate.

"Assuming we don't make up for this in February, it is a bit of a positive in the winter [economic] quarters," says David Wyss, chief economist at Standard & Poor's. "It's worth about $600 billion on an annual rate, so it's a lot of money."

That said, Jack Frost has nipped into the California economy, causing hundreds of millions of dollars in damage to citrus crops this week. And weather-related power outages in the Midwest will keep some businesses closed.

To the degree that savings accrue, much of it will be in the Northeast, where winter just seemed reluctant to arrive until Wednesday. Long-range forecasts from AccuWeather suggest the arctic air may not stay, but rather come and go in cycles.

Of course, June weather in January hurts some businesses that count on snow and cold. Wachusett Mountain ski area near Worcester, Mass., closed two days last week for the first time since a winter some 15 years ago that was dubbed "June-uary."

So far this season, sales of day lift tickets are down 25 to 30 percent, says Tom Meyers, director of marketing at Wachusett Mountain. Still ahead is the February school break – one of the biggest weeks of the year.

"There's a lot of winter in front of us," says Mr. Meyers. "And everyone in the ski industry is eternally optimistic."

While ski parks at least can make snow even when none falls, snowmobile enthusiasts in the Northeast have been largely stranded for two years running. In Maine, the industry brings in $350 million – the equivalent of 3,300 full-time jobs, says Bob Myers of the Maine Snowmobile Association.

When snow refuses to fall, it's not just snowmobile retailers who hurt, but also repair and rental shops, and motels and restaurants along the 13,500 miles of maintained trails that cross the state from end to end.

"Snowmobiling takes place in pretty rural parts of the state, and the businesses it affects for the most part are small, family-run businesses," says Mr. Myers. "These people can't afford to take this kind of hit."

Some retailers, too, are bemoaning a winter of lost sales, particularly for hats, scarves, gloves, and coats. "These sales are not transferable to other products," says Jim Baum, president of Baum's, a department store in Morris, Ill.

In fact, the weather may be changing some buying habits. "I've stopped buying wool," says Tracy Mullin, president of the National Retail Federation. "Why bother for two months of winter?"

But for the most part, this winter will be remembered for the extra money in Americans' wallets. In October, the Energy Information Administration (EIA) estimated that Americans would spend about $75 total less on heating over the winter than last year. Since then, oil prices have continued to fall, standing at $50.57 per barrel Wednesday morning.

"Given the recent 60-degree weather in the Northeast, it's a good assumption that heating costs will continue to fall," says Neil Gamson, an economist at the EIA.

In Sherman, Conn., resident Peter Roche can attest to the break on his heating bill. He has filled up his 1,000-gallon fuel tank only once since spring. "Normally, the oil company puts in 500 gallons two or three times during the winter," Mr. Roche says.

But Roche is saving money on more than oil. His driveway has yet to be plowed, saving him $40 per plowing. He's still taking logs off last year's woodpile; it has been too warm to use the fireplace much. And because there's no snow near his second home in Vermont, he figures he's saving money on lift tickets.

Sherman's town government is also benefiting from the warm and dry winter. No snow helps the town of 4,200 save money on maintenance, says Don Lowe, a selectman. "Someone is always hitting something with a plow, and it's very expensive when the plow gets bent," he says.

For others, the snowless winter in the Northeast is a mixed blessing.

That's the case at Dolan Landscaping in Worcester, Mass. The company has yet to send out its snowplow trucks – in a region renowned for snowfalls measured in feet, not inches.

"On an average storm we probably make $3,000, and we usually have at least a couple storms a month," says company owner John Dolan. "The flip side with warm weather is we're still doing landscape-installation jobs that we normally don't do at this time of year, like planting trees, because the ground has yet to freeze."

For builders in the North, the warmer weather has been a boon. This time of year usually means digging lumber piles out of the snow, says Stephen Hinckley of Hinckley Brothers. "But when it's like this, you just show up and go to work," he says. "It may help my project go quicker at this point than I had anticipated," he says, noting that he built some slack into the schedule for bad weather but hasn't had to use it yet.

Alas, the good times probably won't last, says Gerald Mohler, an AccuWeather meteorologist in State College, Pa. "The weather pattern is changing right now," he predicts. "[Over] the next few weeks the temperatures will be below normal, and when we compare it with how we felt in the beginning of January it will be noticeable."

However, the colder weather isn't likely to override the gains from the warm temperatures to date, which have been 9 degrees above normal. "We would have to get an awful lot of cold weather," he says.