Hurricane causes £100m blow to economy
Friday 09 December 2011
The single day of hurricane-force winds that battered Scotland could cost the country's economy around £100 million, business experts have warned.
Early closures, blocked roads, power outages and employees staying at home caused a drop in both revenue and productivity.
Analysts from professional services firm PricewaterhouseCoopers (PwC) said the lost revenue caused by winter weather could push already struggling businesses over the edge.
Meanwhile, tens of thousands of properties are still without electricity, with the possibility that some homes could have no power until Sunday.
Scottish Hydro said 70,000 customers were cut off this morning, down from 105,000 last night, while Scottish Power had 2,000 customers "off-grid".
There were 400 separate incidents disrupting the electricity network in the north of Scotland, including the western and northern islands, equivalent to two months' work in just one day, Scottish Hydro said.
PwC said pub, restaurant and hotel owners, retailers and hauliers were particularly hard-hit by yesterday's storms.
The £100 million figure is based on previous research which suggests that, for every day the UK grinds to a halt, the economic loss is £1 billion a day, the equivalent of around £100 million in Scotland.
PwC's head of private business in Scotland, Caroline Roxburgh, said: "In the past, harsh winters tended to impact on manufacturers but were compensated for elsewhere in the economy. Historic data also suggests that even in extreme weather, much of the productivity lost is actually made up fairly soon after.
"For some Scottish businesses however, the losses they experience will be permanent. If someone has cancelled a restaurant booking or not gone to the theatre or the cinema then that money will be lost.
"Retailers who are already facing arguably the toughest trading conditions in recent history will be particularly badly hit, as Christmas shoppers stay at home at the most profitable time of the year for them.
"Preparation is of course everything and it is important that businesses act now to ensure they can continue to deliver their most critical services.
"While some businesses may be robust enough financially to take the hit, others may well be teetering on the edge and, for them, a winter like last year may well push them over the edge."
The Association of British Insurers said it was too early to estimate the cost of damage from the storms.
Across Scotland work is being carried out to get the country back to normal.
Scottish Hydro said its engineers are using helicopters to get to some areas still cut off by blocked roads.
Some homes could stay without electricity until Sunday, the company admitted, but it said it hoped most people would have their power restored by tonight.
But while the winds have been easing off in most of the country, the north-east and the Shetland Islands were still suffering.
The Met Office is also warning of snow, blizzards and ice on the roads across Orkney, Shetland, the Highlands and Grampian.
Northern Constabulary said conditions have improved in the Western Isles and the Highlands but many roads are still blocked by fallen trees and surface water.
Severe weather in Orkney has caused widespread damage and flooding. The B9047 South Walls road on Hoy island is closed at the causeway and several areas are without power.
All schools in Orkney, Caithness and the north coast of Sutherland in the Highlands are shut.
Fourteen schools are closed in Aberdeenshire and some schools in Angus, Argyll and Bute, Shetland, Stirling and the Western Isles have power failures.
Aberdeenshire Council said its services have been badly disrupted by the weather. The area also has problems with telephone networks and internet connections.
The British Red Cross said its volunteers are on stand-by to provide food, clothes and medical supplies to people in cut-off areas.
Spokesman Ian Rideout said: "The public should remember to consider those who may be vulnerable or may have become vulnerable as a result of the severe weather. In particular, consideration should be given to elderly residents, pregnant women and those with young children."
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