Record Heat Is Hurting Businesses Across the U.S.

When a dangerous heat dome settled over Minnesota in mid-July, a brewery in Duluth lost its air conditioning at the worst possible time. Canal Park Brewing Company had to close for a full day and stop outdoor service for three days. The extreme heat wasn't just uncomfortable — it cost the business money during its busiest season of the year.

Alex Niemi, a manager at the brewery, said the timing was tough. The business makes most of its money during summer, when tourists visit the area. 'Even just those couple of days, it kind of threw off our whole month,' Niemi said. The brewery serves small-batch beers and pub-style food, and warm weather usually brings in big crowds.

July was officially the hottest month ever recorded in the lower 48 states. Experts say rising temperatures are becoming a serious problem for the U.S. economy. Heat waves are hurting small businesses, slowing down public transportation, and causing power outages in cities and towns across the country.

Jeremy Porter is a climate risk researcher at a firm called First Street. He told CBS News that heat waves hurt the economy mostly by making businesses less productive. 'It's the disruption of business as usual, whether it's because of damaged infrastructure, power disruptions or reduced labor productivity,' he said. When people can't work safely or equipment breaks down, businesses lose money.

A study by First Street looked at nearly 30,000 business reports. It found that extreme heat was the third most common climate concern for companies. The top two concerns were about drought. These findings show that businesses across many industries are worried about what hotter weather will mean for their future.

Not every part of the country is ready for this kind of heat. Porter said areas in the Northwest, Midwest, and Northeast are especially at risk. These regions have not had to deal with extreme heat as often in the past, so many businesses there don't have the tools to handle it. Some don't have enough air conditioning, flexible schedules, or strong enough buildings to stay open safely when temperatures soar.

That is exactly what happened in Minnesota. Niemi said Duluth does not usually see many days above 90 degrees Fahrenheit. Running the air conditioning nonstop for several days in a row was too much for the system. Even when the AC does keep working, electricity bills can spike quickly — and those costs hit small businesses especially hard.

Heat waves can actually do more damage to the economy than other natural disasters. Unlike a tornado or a flood, a heat wave can cover a huge area for a long time. That means more businesses are affected, and the economic damage spreads farther. Urban areas face extra risk because cities trap heat and hold a lot of economic activity in a small space.

Recent heat waves in the U.S. led to an estimated loss of 0.6 percentage points in the country's gross domestic product, or GDP. GDP is a measure of all goods and services a country produces, so even a small drop represents a large amount of money. One economist noted that wildfires cause a lot of local damage but don't affect GDP as broadly as heat waves do.

Workers who spend time outdoors are in the most danger during extreme heat. This includes people in construction, farming, and manufacturing. Federal data shows that extreme heat killed 436 workers between 2011 and 2021, an average of about 40 deaths per year. Researchers believe the true number may be even higher, because death certificates often list other health conditions as the cause rather than the heat itself.