The Most Important Weather Factors

The recent years have shown a growing influence of weather impacts on economy and an ever growing demand to analyses and manage this risk. 

Weather factors influencing businesses vary according to sectors and products, as well as geographical areas.

The temperature often has a determining influence. But other weather or on weather related factors such as sunshine, rainfall, windspeed, calendar events... can also be significant. Our experience shows that it is rarely a single factor

Depending on their products, distribution channels, geographical organisation, companies do not have the same exposure to weather conditions. Their weather sensivity is different. This is why each company or product needs a specific analysis to quantify precisely its weather-sensitive before implementing an operational solution to manage this risk.

Example of weather-sensitive products :

Talking about the temperature?

In weather-sensitivity analysis, one should beware of preconceived ideas.

A few examples:

• 20°C is not the double of 10°C
• The impact on sales of 2 weeks at 10°C followed by 2 weeks at 30°C is very different from 4 weeks at
  20°C
• For the same category and the same time, 10°C does not have the same impact on sales in Marseille
  or Lille
• For the same category and the same place, 10°C does not have the same impact on sales in October or March
• For the same category and the same place and the same date, an increase of 1°C does not have the same impact on sales at 10°C or 20°C
• A deviation from the seasonal average is often more of a determining factor than the absolute level of temperatures
• For certains products, the average temperature for the day is the explaining factor; for others, it is the maximum temperature
• …

When modelling weather impact, METNEXT experts analyse all possible weather or non-weather related factors and integrate the crossed influence of a number of parameters.

They also analyse the delayed effects between a weather phenomenon and its economical impact and identify the threshold or ceiling effects.