Predicted harsh winter may be a revenue buster for Grand Rapids

After this opening week of ArtPrize with the city of Grand Rapids filled with warmth, sunshine, and tourists spending money, imagining winter is a bit of a cold, wet blanket, but the predictions of another harsh winter for the Midwest have business owners wondering how another bitter season of snow could affect their bottom lines.

Last winter multiple cycles of polar vortex put a strain on natural gas companies, and many were unable to provide needed fuel because of bottlenecks in the system. The resultant increased demand pushed fuel prices far higher than usual, which cut into many companies’ profits. Multiple EPA-driven closures of coal-fired power plants will only drive prices higher and restrict the supply of energy. A lack of heating fuel could be ruinous for companies that stock groceries, high tech equipment or anything else that must be stored at a constant temperature.

Another commodity in short supply is road salt. Because so much was used last winter, there is less available now and prices will be higher. Most directly affected will be municipalities and commercial snow plow operators. They will have to juggle their budgets to come up with the money for salt. Last year many plowing companies operated at a loss because of all the extra manpower they were contractually obligated to provide. Their rates this year will factor in the potential for harsher weather and will likely be higher - which may mean less blacktop will be cleared. If roads, parking lots, and driveways go unplowed and unsalted, fewer customers will venture out to shop.

Of course a hard winter is boon for some industries. Plenty of snow is a boon for ski slopes and tourist attractions catering to snowmobile enthusiasts, and the cumulative effect of worsening roads gives auto repair shops more work. A survey of businesses in the Grand Rapids area done by the Seidman College of Business at GVSU found that, despite the rigor of last winter, most companies did not report large losses and overall economic growth did not stop in 2014, although it slowed.

West Michigan has weathered any number of cycles, weather and economic, and is still standing strong, but it relies upon the supply of energy at reasonable rates to continue to grow. It remains to be seen if the combination of increased EPA regulation and harsh winter weather will have a strong negative effect on companies in the first quarter of 2015.