Houston weather: Excessive heat and how it affects the economy

HOUSTON - As we enter another stretch of heat advisories, it poses the question of what effects we could see to the economy.

"When we study the effects of greater temperatures especially in the summer, we find that a one degree increase in the average summer temperature reduces the economic output by 0.2%. So if you get a couple of degrees that stuff starts adding up real fast," said professor of economics, Christopher Clarke.

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Clarke says one or two days of excessive heat won’t do that much damage, but these long stretches we’ve seen this summer, especially if it continues, will have a large negative impact.

"There’s some economic research that shows that one third of economic potential growth over the next century might be reduced because of the increased warming," Clarke said. 

The major impacts can be seen in the industries that work in the heat such as construction. Houstonians also may be less willing to spend time at outdoor restaurants or bars.

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The increased utility costs also prohibit extra spending. Clarke explains, "The effect on utility bills is estimated to go up by around 10% across America, and that’s going to harm people’s budget. They’re no longer going to be able to buy other things that bring them more value and more joy."

However, there is one silver lining that can be seen specifically in Houston in our two major business sectors.

"Those two sectors, the oil and gas and the utilities sectors are two of the sectors that actually benefit from higher temperatures," said Clarke. "The whole country is going to be using utilities more, and some of that increase in the national demand will positively affect the Houston economy."

One interesting thing to note, Clarke says the invention of air conditioning is one of the best things to happen for economic growth.