Smaller businesses disproportionately affected by adverse weather, study finds

Research also suggests cold snaps more damaging to economy than persistent snowfall or flooding.

A lack of infrastructure and business resilience means that SMEs suffer more due to adverse weather conditions than larger companies, according to research compiled by the Centre for Economics & Business Research (CEBR) and 8×8 Solutions.

The paper Coping with Chaos: Assessing the impact of bad weather on productivity looks at the effect of adverse weather on the British economy between 2005 and 2015. It suggests lower uptake of cloud technology and subsequently poorer connectivity leaves smaller firms more exposed to the effects of the elements.

The research suggests that since 2005 periods of extreme cold weather have seen national GDP fall by an average of 0.6 percentage points for every instance. A fall in just one degree Celsius below the seasonal average leads to a lower quarterly GDP £2.5 billion less than expected.

This puts extreme cold weather top of the chart of all meteorological conditions in terms of their effect on businesses. Extreme rainfall can also be very detrimental; especially for firms in the accommodation and food sectors. It also disproportionately affects office-based work.

>See also: How to put agile business practices in motion

An example given of the economic impact was January of this year. Rainfall 26.5 mm higher than the ten-year average of 126.8 will potentially cost the economy £76.3 million over this quarter, according to CEBR figures.

One sector that is resistant to poor weather is ICT and communications. Due to being early and enthusiastic adopters of cloud technology (average of 65% users versus a national average of 15-30%), employees are more often able to work from home and effectively work across more than one location.

However, smaller businesses are often not set up in this way, according to CEBR head of UK macroeconomics Scott Corfe.

“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,” he said.

“This is compounded in many cases by inadequate internet connections or computing power at staff homes. In addition SMEs tend to suffer more than their larger counterparts who can spread the setup and maintenance costs of remote working infrastructure across many more staff.”

8×8 Solutions CEO Kevin Scott-Cowell added that “bad weather hits businesses hard, and medium-sized companies are more vulnerable than their larger counterparts”.

“Until now, the technical infrastructure to enable remote working and guard against disruption has been out of reach for many companies, but cloud solutions are changing this,” he said.

“It’s now affordable for any size business to put in place a plan and deploy the right remote working technology. This can make sure it’s business as usual for customers, whatever the weather.”

Further reading: AccuWeather merges with fellow meteorologist WeatherBank

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.

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