Heatwaves weigh on US GDP

Extreme heat and record-breaking temperatures over the past few months have inflicted severe economic damage through reduced labor productivity, infrastructure failures, and operational shutdowns.

A First Street analysis of nearly 30,000 business financial disclosures reveals that extreme heat’s impact on the workforce ranks as the third most common climate-related corporate concern, just behind drought.

The effects are already hitting individual businesses. In Minnesota, Canal Park Brewing Company lost three days of outdoor service and closed for another day after consecutive 90-degree Fahrenheit temperatures overwhelmed its air-conditioning system.

According to insurance firm Allianz, recent domestic heat waves reduced gross domestic product (GDP) by an estimated 0.6 percentage points.

Unlike localized disasters, extreme heat affects larger areas simultaneously and lasts longer, creating greater risks for outdoor industries such as construction, manufacturing, and agriculture.

Federal data show that 436 workers died from heat-related causes between 2011 and 2022.