It is unlikely that anyone has not heard of the devastating wildfires that are burning in the Southwest and Southeast. Severe drought and wind have once again allowed for the perfect conditions for wildfire to spread throughout this region. Obviously, the threat to property and human safety is a given when it comes to wildfires, but how do these natural disasters affect business?
The most obvious impact of wildfire is destruction. Thousands of businesses have been destroyed, or are in the path of future fires. Attempts to protect business home offices generally have little success when it comes to fury of a blazing wildfire. The insurance companies will benefit from the claims that this destruction will initiate. However, the people who lost their homes will not because of the downturn of the housing market. Insurance will not pay to rebuild the $300,000 home they once had if the current market value of the home is only $250,000.
However, what about the daily operations of business not directly in the path, but in areas where evacuations have taken place just for caution. Business owners lose revenues from days and weeks of closing the doors because of evacuation. Employees lose wages. Suppliers of businesses lose revenue from regular orders to stock businesses' shelves. It is a chain reaction. When business are not open, and sales are not being made, everyone connected will incur a loss in someway.
In California, agriculture is at risk of losing out to the wildfire as well. Crops in the path of destruction have no protection from the spreading the fire. An article from MSNBC described the devastation avocado farmers are suffering from the wildfire. see http://www.msnbc.msn.com/id/21492649/ns/business-stocks_and_economy/t/california-adds-cost-wildfire-damages/
Today being the Fourth of July, I feel it is necessary to discuss one small but necessary part of business affected by the fires. Firework shows were banned in numerous parts of the country where drought and wind are threatening to spread fire. Although a ban on the Fourth of July tradition seems it would devastate the firework industry in many places, national news reports claim it has not recognized any serious impact in sales yet. see http://www.foxnews.com/us/2011/07/01/july-4-fireworks-banned-for-fear-wildfires/ However, small businesses and vendors may be effected by the canceling of large public firework displays. When a gathering with large numbers of people is canceled, any vendor counting on that revenue is going to be affected.
Though wildfires have not been a threat to the southwestern region of Ohio where I reside, impacts of the fires will have effects here. The most recognizable effect will be on produce that is only grown in the areas where fire damage is prevalent. Prices will skyrocket for certain items if large numbers are destroyed. However, this is minor in comparison to those in the path of destruction. Good luck and Happy Fourth of July to all those in the path or not.
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