Economic impact of heat

Rising heat in Europe is increasingly affecting economic activity because it makes it harder and less safe for people to work—especially in outdoor and physically demanding jobs like construction, agriculture, and transport. High temperatures can reduce workers’ productivity, lead to more breaks or shorter working hours, and increase health risks such as heat stress. Heat can also strain infrastructure (like roads, railways, and energy systems), disrupt supply chains, and increase demand for cooling, which raises energy costs.

This indicator estimates the effect of temperature anomaly, defined as the difference between current temperature and mean temperature from 1981–2010, on real gross domestic product (GDP) per capita growth in Europe.

Interpretation of results:

GDP per capita growth in southern Europe was estimated to be 0.99% (95%CI 0.073-1.001) lower due to positive temperature anomalies (referring to observed temperatures being higher than the reference value).

Caveats

The main caveat in this indicator is that the GDP growth data is available only at the annual level; as such, temporal heterogeneity cannot be accounted for.