Extended Hot Weather’s Impact on Markets and Daily Living

I live in Las Vegas and it is predicted that “dangerously hot weather” will be in the valley for the near future. How hot? It is expected to be 118 degrees on July 8, which would be an all time record breaker.

Living in an environment with extremely high temperatures calls for adjustments to be made for daily living. For example, many people, if they can manage, make sure to do their errands in the early morning hours. Chilling bottled water in advance, or bringing along an insulated cup with filled ice are helpful for staying hydrated with cool water. Sun shades on windshields are a necessity for keeping the steering wheel from becoming, literally, too hot to handle.

Not only is daily living affected but extreme high temperatures have an impact on various markets and work environments as well. Here are a few highlights from recently written articles on the topic.

  • Reuters reports that “construction projects slow down, retailers adjust delivery routes, and manufacturers and warehouses use cooling to maintain productivity.” Also, efficiency drops, even though oil refineries “are geared to withstand high air temperatures.” For agriculture, “farmers try to provide extra water for crops and humans alike, as well as shade. And they cut hours worked.” During heat waves, tech companies need to safeguard big data centers, which might require backup generators.
  • US natural gas prices will go up, according to Business Insider. “During heat waves, electricity demand typically surges. People rely heavily on air conditioning to cool their homes and businesses. This surge in electricity use typically drives up natural gas prices.” Along the same line, S&P Global writes that this week’s heat wave on the US West Coast will “drive up power demand and wholesale power prices.”
  • In addition to straining the electricity grid, and reducing crop yields, Solomon Hsiang, University of California, Berkeley indicates “all aspects of the economy slow down” and “heat can lead to more accidents on the job… It can also increase health care costs.”
  • In agriculture, FAS writes, “rising temperatures worsen challenges like water scarcity, soil degradation, and pest infestations, and introduce new risks like heat stress for farmworkers.” 

Stay cool, my friends!

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