Texas’ record-breaking temperatures this year are making businesses sweat.
In a new survey of 352 business executives in Texas from the Federal Reserve Bank of Dallas, nearly 25% say revenue and production have either decreased slightly or significantly due to the high temperatures in recent months. Among those, 38% say difficulty operating in extreme temperatures is a primary factor in diminishing revenue.
Waco economist Ray Perryman said the impact of high temperatures is undeniable.
“There is no question that the heat wave has had measurable economic impacts,” Perryman said. “The findings from the Fed survey are very much in sync with our quantitative analysis. There are both winners, like utilities, air conditioning repair, and losers such as insurance companies, but in balance, there is a net loss to the economy.”
Lauren Neat, director of digital marketing and e-commerce strategies for Dallas-based Kate Weiser Chocolate, said the company had to subject its product to 120-degree temperatures during testing to determine which packaging and ice packs could keep it cool.
“We even thought about shutting down shipping completely during this weather, but luckily we didn’t have to,” Neat said. “I think that’s because we were prepared with how hot it was supposed to get. We planned for a good six weeks how to figure out what to do.”
Retailers said they were hit the hardest, with 30.5 percent saying that the heat wave had negatively impacted business. Construction companies have also had to resort to wearable sensors to protect employees from the heat.
Even companies like Six Flags have had to adjust. According to Roxanne Butler, manager of marketing and public relations for Six Flags Over Texas, this year the company has added more shade structures and seating areas, a new water spraying system at the Bugs Bunny Boomtown shade area and misting fans as a result of the heat.
Restaurants have not been immune to the effects of the heat wave, as well. The industry has seen a diminishing number of dine-in customers as traffic has fallen 3 to 5 percent compared with last summer, according to OpenTable.
According to an analysis from the Perryman Group, Texas could lose almost $400 billion in real gross product in 2050 if temperatures stay one degree above the historical average.
“The long-term effects of this particular heat wave are likely to dissipate and be relatively minimal,” Perryman said. “However, if we continue to have similar weather over time, the compounded effects are very significant.”
