Consumer prices rose 7.5% nationwide from January 2021 to 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
and that’s when we saw the first surges in growth. The last quarter of 2021 was just incredibly strong. It was the stron- gest quarter on record for job growth.” With businesses fully operational, they need as many hands as they can get, meaning less flexibility in schedul- ing than there was a year ago, he 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 and eat at short-staffed restaurants. A February inflation update from the GHP reported a 7.9% rise in con- sumer prices nationwide compared to February last year. The GHP also reported Houston’s unemployment rate fell to 5.3% in February, down 0.2 percentage points from the last month. This influx of job opportunities has left many businesses struggling to find enough employees with some peo- ple choosing to work for themselves
instead of going the traditional route of working a 9-to-5 role, Ferraro said. However, when faced with these hardships, local Katy businesses have adapted and persevered, he 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 opened back up, variant outbreaks still pose a threat to this system, leaving business owners wondering when they will get their next shipments in. One such local business is Clean Juice Morton Ranch, which has struggled to get organic pro- duce for its products as well as plastic lids and straws. “I think every business has a unique challenge in this—and ours is
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Lower demand
25.3%
Matthew Ferraro, president of the Katy Area Chamber of Commerce, said businesses in the Katy area have struggled in their own ways during the pandemic. “Obviously, supply chain shortages are causing a lot of headaches for every- one,” Ferraro said. “It’s hard to pinpoint anyone who [it has not affected]. Even new cars are taking months to get built because you can’t keep them in stock. I think it’s affected everybody in every industry [in] one way, shape or form.” Houston’s economy has recovered andreboundedfromshutdowns, often- times 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 realized we didn’t need to shut it down,” he said. “So things started opening back up,
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
the fact that we’re certified organic,” franchise owner Melissa Bonesteel said. “We have to actually show that we’ve gone to multiple suppliers in order to try to find organic first, and because we’re newly open, it’s very, very important to me that I provide certified organic products.” Bonesteel has been able to find pro- duce at places such as Trader Joe’s and Whole Foods, but she said the products
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