Aug 31, 2023 - Business

Heatwave negatively affected a quarter of Texas businesses

Texas workers have needed more breaks in the extreme heat this summer. Photo: Sergio Flores/Bloomberg via Getty Images

This summer's heatwave negatively affected revenue and production at about a quarter of Texas businesses surveyed by the Dallas Fed.

Driving the news: For the first time in its monthly manufacturing and service sector surveys, the bank asked hundreds of Texas business executives about the impact of record-breaking heat.

  • Retailers and manufacturers that reported a decrease in revenue or production said lower customer demand and lower labor productivity led to the declines.

Why it matters: The survey quantifies what many of us are hearing anecdotally — people are less likely to go out, and workers are struggling in the heat.

Details: Lower customer demand was the primary driver of decreases in revenue for retail businesses.

  • Manufacturers reported that decreased revenue and production were driven by lower labor productivity and workers struggling to work in extreme temperatures.

Of note: Most of the businesses that reported a decrease in production and revenue to the Dallas Fed said the drop was slight. Just about 5% reported a significant decline.

The bottom line: The summer heatwave is predicted to cost the Texas economy nearly $10 billion, per an analysis by The Perryman Group, an economic consulting firm.

  • The projected losses are due in part to declining productivity as workers struggle in extreme temperatures, per the Houston Chronicle.

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