TEXAS — As record-setting heat levels rose across Texas this summer, the state's economy took a downturn.
According to the Federal Reserve Bank of Dallas, the summer heat likely reduced Texas' gross domestic product by 1%, amounting to as much as $24 billion. The Dallas Fed said in an analysis that companies had a harder time supplying goods and consumers spent less.
"Anecdotally, everyday behavior in Texas changed during the summer of 2023 as the heat bore down," researchers said in their report in an update on the Southwest economy.
As determined from their Texas Business Outlook Survey, the Dallas Fed said the summer heat's impact on the state's GDP growth is twice as pronounced when compared to the change for the rest of the U.S.
The agency said the heat's effect on job growth is also a potential concern, but it was not as drastically affected as the drop in GDP.
A spur in economic activity is expected to rise as seasonal temperatures move in though, researchers said. Agricultural and real estate industries—for example—are expected to benefit from springs that warm sooner, the report said.
It also states the number of 100-degree days are expected to double by 2036 when compared to the previous two decades.
The report noted this especially for urban areas, which may force local industries to make long-term changes for their summer operations.
"As climate change's effects intensify over the next decades, heat waves will become more commonplace and severe," said researchers. "However, the economy can adapt."
