How US industries deal with extreme heat

• Posted on June 24, 2024June 24, 2024
• by Nana Kwesi Coomson
• Comment

Extreme heat has companies in the United States changing the way they work. One frequent response: work less. Here is how heat affects several large industries and what they do about it:

Construction: Work slows at construction projects. What usually takes two days can take three or four as builders take breaks, estimates Art Hogan, chief market strategist at B. Riley Wealth. Changes could include shifting the workday earlier.

Slowing projects could also hit the companies that sell supplies, but the impact to the likes of Home Depot (HD.N), opens new tab and Lowe’s (LOW.N), opens new tab is likely limited because builders buy in advance and the projects are not canceled, Hogan added. And such retailers see demand for air conditioners and fans.

Crude oil: Oil refineries are geared to withstand high air temperatures, but efficiency drops. Financial-services firm Macquarie Group estimates extreme weather costs the oil industry between 1.5% and 2% of refining throughput a year.

“Temperatures matter a lot,” said Vikas Dwivedi, global energy strategist at Macquarie. Refiners in hot climates limit time workers are outdoors, set up hydration stations and move work shifts earlier in the day, to cooler hours. Austin Lin, a former refinery worker and now an analyst at energy consultant Wood Mackenzie, said he would organize work so arriving contractors could immediately start projects, without waiting for assignments or briefings. In extreme heat, around 110 degrees Fahrenheit (43 degrees Celsius), workers can only spend about 30 minutes of the hour working and need regular breaks to stay safe.

Retail: Retailers may see more demand for shorts and other clothing that works well in the heat, in addition to fans and air conditioners. One of the most significant changes in retail for high-heat situations involves delivery of items ordered online.

Amazon (AMZN.O), opens new tab says it adjusts routes on hot days to give drivers more time to cool off and offers drivers beverage coolers in vans and water-filled sleeves that keep temperatures down. The Teamsters union, meanwhile, is using extreme heat to rally workers, saying unions can secure better protection.

Transportation: Heat makes travel harder. Airplane wings don’t generate as much lift in heat and flights stuck on the tarmac have been reported with triple-digit-degree F temperatures inside. Railroads may limit train speed over concerns heat will warp tracks and damage engines and electrical components.

Manufacturing and warehousing: Companies with huge buildings often condition the air with systems that are less costly than the air-conditioning used in homes and offices. Fans to drive out hot air, mist to cool work environments and plenty of available water are top responses. Spirit AeroSystems (SPR.N), opens new tab, which makes plane parts for Boeing (BA.N), opens new tab, says its water-cooled system keeps maximum temperatures in its factories in the low 80s F, and there is no impact to production.

Agriculture: It would take weeks of prolonged heat to reduce yields of recently planted corn and soy crops in the U.S. Midwest, especially with beneficial rains forecast in coming days, analysts say. Modern row-crop agriculture requires few workers in the fields for planting and newer tractor cabs are air-conditioned, mitigating human risk. But in California’s central valley, grapes are tended by hand.

Temperatures can swing tens of degrees F over a few days, and the heat working within rows of grapes is four or five degrees F hotter than the surrounding area, some workers estimate. Farmers try to provide extra water for crops and humans alike, as well as shade. And they cut hours worked.

Tech: In heat waves, tech companies need extra effort to cool and safeguard big data centers, which are seeing soaring demand from the artificial-intelligence boom that relies on power-hungry microchips.

That may mean use of backup generators, which data-center operators such as Digital Realty say can remain operational for hours, even days.