When weather events happen, economic repercussions usually follow. Consumer behavior as well as supply and demand for a product or raw material can be affected. Energy demand soars during heatwaves; insurance claims rise after hailstorms; snow slows in-store shopping but can increase online sales; and grain prices spike during drought.

Understanding how those impacts affect the U.S. economy has spurred a growing demand for analysis of weather and climate data. Using NOAA’s data archive at NCEI, a broad array of third-party services are meeting the practical needs of companies and their customers.

NOAA Data Support Weather Service Providers

Today, more than 250 weather service providers support businesses with information that helps answer how weather and climate affect economic outcomes. For many parts of the U.S. economy, third-party weather vendors are stepping in by analyzing data based on sector-specific issues. The vendors, also known as weather service providers or decision support providers, tailor applications to weather-related questions based on a wide range of needs.

By combining NCEI data with business-specific information, third-party weather vendors are taking the guesswork out of potential market changes. Many businesses use third-party services on a regular basis to study consumer behavior, logistics, weather patterns, and much more. Economic sectors include energy producers, retailers, seasonal maintenance crews, transportation, law firms, and insurance companies.

An increasing number of companies are faced with the need to adapt their business models based on weather volatility. Weather alone can cause the gross domestic product (GDP) to fluctuate 3 to 6 percent a year, or as much as $1.3 trillion, based on a National Weather Service analysis. Demand for value-added weather services is projected to grow by 10–15 percent a year, according to a new study for NCEI that illustrates the important uses of data by leading third-party service providers.

NCEI Weather and Climate Data Lay the Foundation

As the chief repository of NOAA data, NCEI houses a wealth of environmental data that weather service providers use in product and service development. Weather service providers apply NCEI’s data in many ways. Providers, such as The Weather Company, WeatherBELL Analytics, Baron, and AccuWeather, use NCEI’s data a step beyond developing weather forecasts.

For instance:

• Energy traders develop consumer-demand forecasts when weather is expected to impact a region

• Insurance companies apply forensic analysis to weather-related accidents and claims

• Transportation providers determine where to build facilities so that fog, snow, or other weather factors pose fewer challenges to logistics

• Retailers analyze how seasonal patterns can affect merchandising and operations

The third-party weather service industry, currently valued at $7 billion, creates customized products such as maps, charts, graphics, and reports, or software tools and dashboards based on user specifications. Providers often accompany products with consultation services. With NCEI data, tailored services are poised for continued growth.