How does a mild winter affect Chicago’s economy?

Let’s call this Chicago winter a “reboot.”

After recent winters with lower than normal snowfall or higher than normal average temperatures, Chicagoans this year are getting long cold snaps and a near-normal amount of snow. It’s been streaky, but it’s been a winter closer to what lives in long memories.

A typical Chicago winter is good for business for certain sectors of the economy. That includes car mechanics and auto body shops, according to Mike Wendling, an IAM Local 701 organizer who represents those workers in the Chicago region.

“In the extreme weathers is when you just make more money than normal,” Wendling said of his workforce, adding that cold, snow and ice cause more dead batteries, more busted tires and more cosmetically-damaging car accidents.

Some other businesses that get a bump from a bitter winter include natural gas companies, HVAC repair companies and plumbers (here’s your reminder to insulate your water pipes).

However, Chicago winters are actually getting milder in terms of average number of days below freezing. The city has experienced an average of 15 fewer days below freezing in the last decade, compared to the period between 1959 and 1980, according to a 2025 Crain’s analysis of data from the National Oceanic and Atmospheric Administration.

So, do mild winters have a noticeable effect on the local economy? It’s a complicated question with many compounding variables. According to recent economic research from the Federal Reserve Bank of San Francisco, the answer in the short term is: Yes, but the effects are short-lived. In the longer term, the answer is also yes, but exactly how remains to be seen, as climate change is predicted to cause “substantial reallocations of people and jobs across the country.”

Winter winners: Businesses that keep people moving and warm

Perhaps the industry that is most dependent on winter? Snow removal services.

“I’ve learned a hard lesson in life with the snow business,” said John Geroulis, owner of Snow America Inc., which offers snow removal services to around 200 businesses and HOAs in Chicago. “When it snows, you make money. When it doesn’t, you don’t.”

A low-snow winter definitely has an effect on Geroulis’ economics. He said he made some changes to his business a few years ago after he noticed a worrying trend.

“I was like, ‘Wow, the winters aren’t like when I first started in the ‘70s,’” he said.

Geroulis now uses a pair of strategies to combat low-snow winters. The first is offering two types of contracts: one that charges per snow and another that charges a flat fee every month and is signed by customers before the winter begins. His second strategy is diversification — he also owns a construction company and employs the same workers for each business.

“I don’t know of any competitor that’s focused just on snow, personally,” Geroulis said.

If you’re wondering how the city of Chicago handles snow, the Department of Streets and Sanitation operates its own fleet of snow plows and salt spreaders. They only use outsourced help from private companies when things get really bad.

“We did it six years ago, when we got literally a season’s worth of snow in three weeks,” said Chicago Streets and Sanitation Commissioner Cole Stallard. “It’s safety. The streets have to be safe and passable.”

As for restaurant and entertainment sectors, incremental city restaurant tax and amusement tax data was not available for this story.

But if you notice that you tend to shop in person or dine out more during unseasonably warm winter days, research suggests those short-term bursts do not have a long-term effect on the economy.

In the short term, winter winners and losers come out in the wash

Imagine this: It’s a gorgeous 60-degree Saturday in February, runners in running shorts, shoppers hitting the strips. On a day like this, consumers may be more likely to go out and spend some money.

According to a research paper published last year by economist Daniel Wilson with the Federal Reserve Bank of San Francisco, short-term granular shocks in weather have a statistically significant economic impact on retail, leisure and hospitality, but the impact is temporary.

The paper argues that “favorable weather stimulates retail activity in the short-run” but with a big caveat: “[L]ocal weather shocks have only short-lived impacts on local economic activity.” In fact, the positive economic effects of favorable weather will rebound in the months that follow. “After an initial shock, the granular weather effects respond in the opposite direction for the following two months.”

So, consumers who spent their discretionary money during a warm weekend in February are less likely to have discretionary income to spend during a warm weekend in March. They have pulled forward their discretionary spending; the following month, they will do less of that activity, regardless of the weather, according to this research.

This concept works in the reverse as well: If you spent very little during this winter’s polar vortex, you might have responded by spending more over the unseasonably warm Valentine’s Day weekend. That means the short-term effect of a mild winter is exactly that: short-term.

“The lagged effects [of selected weather variables] typically offset the contemporaneous effects, leading to near-zero cumulative effects after 3 to 4 months,” according to the paper.

In the longer term, a region’s climate is one of many variables that affect where people live and work, according to another paper co-written by Wilson in 2023 that aimed to predict how climate change would affect the national economy. “Using county-level weather projections based on alternative greenhouse gas emissions scenarios,” that paper projected “substantial reallocations of people and jobs across the country over the next three decades.”

An increase in extreme weather could be a variable that breaks the decades-long population trend toward the nation’s Sun Belt region, according to that paper. It projected that population and employment are likely to shift away from the Sun Belt and toward the North and Mountain West in the next 30 years.

What that means for Chicago’s economy remains to be seen, but it is sure to lead to adaptation. For John Geroulis of Snow America, he’s long thought of the snow removal business as recession-proof. But he won’t be surprised if Chicago’s changing climate means his business will have to adapt again.

“I can completely see, in the next three to five years, not even offering a per-occurrence or per-push contract and just offering only a seasonal per-month contract to everybody, for that only reason,” he said.

Justin Bull is a producer with Curious City.