Consumer prices rose 8.5% nationwide from January 2021 to March 2022, the highest rate of inflation since 1982, according to a Greater Houston Partnership analysis of U.S. Bureau of Labor Statistics data. INFLATION INCREASE
WHAT MAKES THE PROBLEM WORSE?
NOTE: PERCENTAGE CHANGES ARE FROM FEBRUARY 2022 AND NOT SEASONALLY ADJUSTED. year. CPI measures the average change in prices paid by urban consumers for various goods and services. CPI 101 The consumer price index has risen in the last
Fuel oil +43.6%
Food +7.9% Energy services +12.3% Transportation services +6.6% Used cars & trucks +41.2%
A January survey of Texas business owners found 70% of businesses had been negatively affected by COVID-19 in the past month in part in the following ways.
Houston U.S.
Consumer price index
Increased employee absenteeism
83.3%
-2% -1% 0% +1% +2% +3% +4% +5% +6% +7% +8%
Reduced productivity due to alternative work arrangements
The consumer price index in the Houston metro has been on the rise since late 2020.
46.7%
New or worsened hiring difficulty
43.6%
New or worsened supply chain disruptions
43.6%
SOURCES: U.S. BUREAU OF LABOR STATISTICS, GREATER HOUSTON PARTNERSHIP/COMMUNITY IMPACT NEWSPAPER
quarter on record for job growth.” With businesses fully operational, they need as many hands as they can get, meaning less flexibility in sched- uling than there was a year ago, Jan- kowski said. Costs for goods and supplies are higher for these mom and pop shops as well, making it more difficult to raise wages and leaving a gap in production as more people go out to shops or eat at short-staffed restaurants. A March inflation update from the Bureau of Labor Statistics reported an 8.5% rise in consumer prices nation- wide since the start of 2021. In Febru- ary, the Houston area was at 7.8%. The GHP also reported a 5.1% increase in job creation in 2021 with 151,800 posi- tions created. This influx of job opportunities has left many businesses struggling to find enough employees, Schmidt said. When faced with these chal- lenges, Sugar Land and Missouri City
businesses have adapted and perse- vered, she said. Ongoing challenges Many of the issues businesses are facing are related to the supply chain— the flow of goods from the producer to the customer—which was essentially halted when the pandemic first hit and nations ceased trading and shipping, Jankowski said. Although many ports have reopened, variant outbreaks still pose a threat to this system, leav- ing business owners wondering how they will cope with the increased costs. One such local business is Mexican-Pakistani restaurant Mint n Chili, which has struggled to pur- chase the organic meats and produce the restaurant needs along with other products such as to-go containers. “There’s all of this shortage now compared to before the start of the pandemic,” owner Shahid Parada
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Lower demand
25.3%
City area have largely been industry specific. “I’mhearing about challenges froma number of companies, especially ones that are in the manufacturing sector,” Schmidt said. “In the service sector, that is not an issue, and a lot of our businesses are in the service sector.” Houston’s economy, meanwhile, has recovered and rebounded from shutdowns, oftentimes resulting in more demand than there is supply, said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership. “We shut everything down in March and April of 2020, and we real- ized we didn’t need to shut it down,” Jankowski said. “So things started opening back up, and that’s when we saw the first surges in growth. The last quarter of 2021 was just incred- ibly strong. It was the strongest
Partially shut down business operations temporarily
13.6%
Fully shut down business operations temporarily
1.6%
SOURCE: FEDERAL RESERVE BANK OF DALLAS/ COMMUNITY IMPACT NEWSPAPER
said. “Before, back when I was in California, or anywhere, really, it was very easy to get everything, but now it’s very difficult.” Parada’s restaurant, which offers burritos, tacos, and bowls that com- bine the flavor of Mexico with Paki- stani spices, uses organic ingredients as well as Halal meat that has grown in cost, Parada said. “Meat like lamb, which I use a lot
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