AUSTIN (KXAN) — The Texas governor posted celebratory news Friday about the state’s economy after the most recent jobs report included some impressive numbers, but a report released this week warns that increasingly hot summers may have a chilling effect on the business climate.
Gov. Greg Abbott’s office put out a news release touting the state’s employers adding 61,400 non-farm jobs in September, which they said makes Texas the leader in the nation for most jobs added. Abbott also noted Texas reached a new high of 14,049,400 total jobs in the state.
“Jobs are surging in Texas thanks to the best business climate and strongest workforce in the nation,” Abbott wrote in a statement.
However, the Federal Reserve Bank of Dallas released a new report Wednesday looking at how hotter summer days are possibly slowing down the state’s growth. The four authors noted the heat may not have much impact in terms of jobs, but they projected the “effect on Texas GDP growth is likely to be twice as pronounced as in the rest of the U.S.”
Anil Kumar, a senior economist at the Fed Dallas, explained what the findings showed about this summer’s temperatures being hotter on average.
“According to our calculations, that will lead to a decline of one percentage point in GDP (gross domestic product) growth,” Kumar said, “and that is equivalent to about $24 billion in Texas.”
Brian Knowles owns Terrible Love Coffee in north Austin’s Hyde Park neighborhood. He moved the trailer where he runs his business to a shaded spot under a tall, leafy tree. That helps create a beneficial barrier for him and his customers, especially when Austin temperatures are expected to creep again into the 90s this weekend.
“Generally, the summers are slower in the service industry regardless, but you definitely feel it even more on a really hot day,” Knowles said Friday. “This past summer was pretty slow because of the 105-degree weather in part, but yeah, generally, summers are going to be slower anyway. So you kind of plan for it.”
Austin’s airport had its hottest summer on record this year, but the cooldown that came during these last two weekends helped boost business more for Knowles.
“It was two of my busiest weekends so far since I’ve been open, so yeah, it’s been great,” he said.
Kumar and the other researchers highlighted a survey of business executives that the Dallas Fed did in August, and the responses showed a quarter of them reported “lower revenue or lower production due to the heat.” That was most pronounced in the leisure and hospitality industry, Kumar said.
What’s interesting, Kumar added, is that warming temperatures during other parts of the year could help the state make up those losses.
“The entire effect is basically a wash,” he said. “The negative effect in the summer is slightly more than offset by the positive effect in the spring and fall.”
The Dallas Fed report also advised Texas businesses to keep adapting to the increasingly intense, prolonged heat.
Austin job numbers
New numbers released Friday by the Texas Workforce Commission show unemployment in Austin dropped slightly last month to 3.6%.
Additionally, the Austin metro added more than 11,000 jobs in September. That’s a gain of more than 42,000 jobs since this same time last year.
Government jobs saw the largest increase last month at 6,500. The trade, transportation and utilities industries also saw an increase of 1,700 jobs. Lastly, professional and business services saw the same increase of 1,700.
Some industries, though, saw decreases from August to September, including manufacturing, finance and information.