Texas small businesses face labor and cost pressures despite job growth
Texas 2036 says small businesses make up nearly all Texas firms and employ millions, while still facing hiring, inflation, borrowing and demand challenges.
Texas small businesses make up 99.8% of all businesses in the state and employ 4.9 million people, but they continue to face labor shortages, inflation, higher borrowing costs and shifts in customer spending, according to a Texas 2036 newsletter preview published March 13, 2024.
The newsletter says Texas has 3.1 million small businesses, which it describes as an economic and employment engine even as many owners deal with rising costs and tight margins.
Construction accounts for 396,601 small businesses in Texas, while professional services accounts for 389,365, the piece said. It said small business owners cite difficulty finding workers as a chief challenge.
Texas 2036 also said inflation remains above the Federal Reserve’s 2% target, and that higher interest rates have made borrowing more expensive. The newsletter said that can make it harder for businesses to expand and can also reduce consumer spending at small businesses.
It pointed to changing customer habits as another pressure. According to the newsletter, some people are cooking at home more often, postponing home improvements or skipping vacations.
At the same time, the newsletter cited a positive employment trend in Texas. It said Texas employment grew by 263,900 jobs from January 2023 to January 2024, a 1.9% annual growth rate, based on Texas Workforce Commission data.
The newsletter did not announce a policy change, law, funding program or enforcement action. It presented Texas small businesses as still exposed to broader economic conditions that can affect hiring, costs and sales.
Sources
Editorial note: This article was prepared with AI assistance and includes source attribution for reader review.
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