Newspaper article THE JOURNAL RECORD

Experts Consider Chilling Impact of Ice Storm on Oklahoma's Economy

Newspaper article THE JOURNAL RECORD

Experts Consider Chilling Impact of Ice Storm on Oklahoma's Economy

Article excerpt

This, said OU economist Robert Dauffenbach, is a great time to be in the tree nursery industry.

"If you're in the tree removal business you're going to have a bonanza," added Gary Trennepohl, a professor of finance and the president of Oklahoma State University's Tulsa campus. "In our campus I bet we're going to lose 90 percent of our trees. To me that's the most devastating financial impact."

Those comments reflect the aesthetics of the storm, the most visible area of damage. And it points to a huge, often overlooked sector.

Trennepohl estimated just replacing the trees at the OSU-Tulsa campus will cost hundreds and thousands of dollars. Multiply that by the thousands of square miles seeing similar wreckage, from Yukon and Norman to Grove and Claremore, and economists might start shaking their heads at the enormity of the issue.

But the real economic quagmire arises from analyzing the 600,000- plus homes and businesses reported Tuesday to be without power for a second or third day. That results in thousands upon thousands of work hours squandered by power losses at retail stores, factories, professional and legal firms, churches, schools, and home businesses. That snowballs into uncountable lost transactions, lost sales tax, lost productivity, and as the situation stretches on, lost perishables.

In a commerce system that survives on daily, sometimes hourly cash flow, each moment that builds debt without gaining a dime of revenue can spell trouble.

Dauffenbach, the associate dean for research and graduate programs at the University of Oklahoma Price College of Business, said the overall health of the Oklahoma economy provided some stability from such a shock, and that some sectors - like hotels or restaurants - are enjoying gangbuster business if they have power.

Some retailers like Food Pyramid and Wal-Mart got several of their Tulsa locations back up Tuesday afternoon. But for every one that does have the juice, one or two or three or more may not. Some power officials have estimated it could take a week or more to reactivate everything, assuming Mother Nature permits.

"It's going to be especially hard on the small businesses," said Trennepohl. "If this goes on probably for more than a week or 10 days, it's going to start pinching people. If it (electrical service) comes back up tomorrow, we're not going to notice much. But if it goes to a week or 10 days, you're going to get into payroll and cash flow problems on many levels. It's just impossible to put a dollar figure on that."

Falling during the key Christmas sales season escalates the risk for retailers (and sales tax-driven governments) that can count on these sales for 25 percent or more of their annual revenue. Dauffenbach said this could create pent-up demand consumers will fulfill once normalcy returns, but Trennepohl had his doubts. …

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