December 09, 2016
We Need to Talk About the Weather
by Anthony Wright
Hurricane Matthew gripped the headlines just a few months ago, but it wasn’t the only major hurricane in 2016 that made an impact. Just last week, the National Oceanic and Atmospheric Administration (NOAA) declared the 2016 Atlantic hurricane season to be the first above-normal Atlantic season since 2012, having produced fifteen named storms, seven of which became hurricanes with three major hurricanes—Gaston, Matthew and Nicole. Typically, a normal hurricane season produces 12 named storms, six of which become hurricanes.
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The end of hurricane season segued into the official arrival of La Nina, in which cooler water in the Pacific ushers in widespread changes in weather across the United States. Expect cooler, wetter weather in the Pacific Northwest and cold air being pushed down into the United States from Canada.
So, while the measure of weather predictability La Nina offers over the next few months is a good thing, it’s worth considering some of the bigger impacts that broad-scale global warming can have on our industry as we close the book on 2016. We’ve seen temperatures climb higher and higher over the past few years; 2016 will be, again, the hottest year on record. That’s an unsettling development in itself, but we also know that these patterns are tied to a rise in anomalous weather events, including coastal flooding and major droughts that can lead to wildfires and more.
Per journalist Gary Thill in a recent piece for Replacement Contractor:
In fact, over the last three decades, the number of weather-related loss events in North America grew by a factor of five, according to a report from the American Academy of Actuaries, which concluded that many Americans can expect insurance costs to rise as a result.
Not very comforting that it’s so much more likely that you’ll lose your home in a tornado, hurricane or wildfire now that your insurance company is starting to bank on it. The cited report notes that water damage has surged over the past 10 years, thanks in large part to hurricanes.
Such destructive weather events lead to inevitable rebuilding after homes and businesses are destroyed, and while that might sound like good business for contractors, Thill also notes that this isn’t the case. The National Roofing Association’s Mark Graham notes in the piece that all the additional work that comes with a destructive storm or other event “upsets the business cycle,” forcing contractors to work at a strenuous pace with no additional resources. The full piece is well worth a read. With today’s tight labor market, having a contingency plan and liability coverage can mean the difference between a profitable year and a total loss.
Weather continues to be a wild card businesses need to take into account in their strategic planning. As Zig Zigular once said, “Expect the best, prepare for the worst, and capitalize on what comes.”
Questions or comments? Contact me directly at Anthony.Wright@Quanex.com.
December 09, 2016 by Anthony Wright
Filed under: trends