How Extreme Heat Impacts US Industries and Their Adaptations

Extreme heat is prompting industries across the United States to alter their operations. One common response is reducing work hours. Here’s how several major industries are adapting to the heat and what that means for business:

Construction: Heat slows down construction projects significantly. Tasks that usually take two days can extend to three or four as workers take frequent breaks, estimates Art Hogan, chief market strategist at B. Riley Wealth. Companies might shift work hours to earlier in the day to avoid peak temperatures. This slowdown also impacts suppliers like Home Depot and Lowe’s, but the effect is limited since builders purchase supplies in advance and projects are typically postponed, not canceled. Additionally, these retailers see a surge in demand for air conditioners and fans.

Crude Oil: Oil refineries are designed to endure high temperatures, but their efficiency drops. Macquarie Group estimates that extreme weather reduces the oil industry’s refining throughput by 1.5% to 2% annually. Refiners in hot climates limit outdoor work, establish hydration stations, and reschedule shifts to cooler times of the day. During extreme heat, workers can only spend about 30 minutes of each hour working to maintain safety.

Retail: Retailers experience increased demand for heat-friendly clothing and cooling products like fans and air conditioners. High heat also affects the delivery of online orders. Amazon adjusts delivery routes on hot days to give drivers more breaks and provides beverage coolers and water-filled sleeves to keep drivers cool. The Teamsters union is leveraging extreme heat to advocate for better worker protections.

Transportation: Heat complicates travel by affecting airplane performance and infrastructure. Airplane wings generate less lift in high temperatures, and planes parked on hot tarmacs can become unbearably hot inside. Railroads may reduce train speeds to prevent track warping and damage to engines and electrical components.

Manufacturing and Warehousing: Large facilities often use less expensive cooling systems than typical air conditioning. They employ fans to expel hot air, misting systems to cool work environments, and ensure plenty of water is available. Spirit AeroSystems, which produces aircraft parts for Boeing, uses a water-cooled system to maintain factory temperatures in the low 80s Fahrenheit, preventing production impacts.

Agriculture: Prolonged heat could potentially reduce yields of corn and soy crops, although beneficial rains can mitigate this. Modern agriculture requires minimal field labor, and newer tractor cabs are air-conditioned, reducing human risk. In California’s central valley, hand-tended crops like grapes pose a greater challenge, with workers estimating that temperatures among the grape rows can be four to five degrees Fahrenheit higher than the surrounding area. Farmers provide extra water and shade, and reduce working hours to protect crops and workers.

Tech: Heat waves necessitate extra measures to cool and protect data centers, especially with rising demand from the AI boom. Data centers, such as those operated by Digital Realty, might use backup generators to stay operational for extended periods during heat waves.