Will the eclipse be an economic boon?
Source: NRK News
Millions of people are planning to travel to see the coming eclipse. Cities and towns along the route of the 70-mile wide totality are racing to complete their preparations. Casper, Wyoming is building a new town square that will be the center of a week-long “Eclipse Festival.” The State of Wyoming expects its population to double. The “Great American Eclipse” web site has a web app that will deliver real-time traffic data – particularly important for folks in South Carolina, where it is estimated that up to 2 million people may travel to the path of totality.
Casper is spending $8.5 million on its downtown plaza – an upgrade that had been planned, anyway. The eclipse just gave city officials a reason to speed up the construction. Many towns along the route are at least making sure they have porta-potties and emergency personnel available to handle the crowds. With the influx of visitors, it’s possible there could be gas shortages, and restaurants and supermarkets could run out of food. Interstates near major cities could become parking lots.
Map by Mark Zeiler. Source: Great American Eclipse
Will all the eclipse-related spending kick the economy into a higher gear? Probably not. The fact that the eclipse occurs on a Monday creates a three-day weekend, and travelers just shift money from what they would have spent, anyways. It’s not like there will be a permanent eclipse economy in the US – although another totality will cross the continent in 2024.
For spending and the economy to grow, incomes need to grow. For incomes to grow, we need to become more productive. A few commercial brands are hoping to cash in – like Casper Mattresses or the Mitsubishi Eclipse. But one-time events don’t usually create permanent changes. Chances are, the economy will continue as it has.
In ancient times, astronomical events like eclipses and comets were considered portents of approaching disaster. Let’s hope soaring earnings and stronger economies can outshine any earth-bound blackouts. And that today’s eclipse won’t be too disruptive.
Douglas R. Tengdin, CFA