As the thermometer hits triple digits, it is hard to believe there is anything hotter than the Texas weather. This may be true, with one exception: the Texas economy.
Although the entire nation has benefitted from low unemployment, much of the economic growth and job creation has originated in the Lone Star State.
This success has been documented and quantified in the CNBC annual survey of the top states for business. Now in its twelfth year, the CNBC assessment has ranked Texas first or second in 11 out of 12 years. Even in the one odd year, Texas was still a top five finisher.
This amazing consistency in good and bad markets speaks well of the state, its resources and its people.
This year has been no different. For the fourth time, the Lone Star State took top honors.
Much of the success was predicated upon a strong energy sector, buoyed by $70 per barrel oil. However, the success translated throughout the state in numerous sectors.
Collectively, Texas has gross state product of $1.7 trillion. This translates into the second largest economy in the U.S. In fact, if Texas were its own sovereign nation, it would be the 10th largest economy in the world, ahead of South Korea and Canada.
Over the past year, the Lone Star State added about 350,000 new jobs. That means that nearly 15% of all jobs created in the last year were in Texas. The state’s unemployment rate of 4.1% has remained at or below 5% for 45 straight months.
Understandably, the CNBC evaluation ranked Texas highly in several categories. Texas rated ninth in technology and innovation, seventh in workforce, third in access to capital and first in infrastructure.
It also helps that Texas is only one of nine states with no individual income or corporate tax. Furthermore, Texas boasts an abundant workforce and lots of land for expansion and housing. As such, 54 companies in the Fortune 500 and 39 firms in the S&P 500 have moved their headquarters to Texas. Texas is also home to some of the largest privately-owned businesses, such as Neiman Marcus, Hunt Oil and H-E-B.
The Lone Star economy continues to expand broadly. Although Hurricane Harvey set the state back in the third quarter of 2017, the fourth quarter rebounded with a stout 5.2% GDP increase. This growth continued in the first quarter of 2018 with strong 3.5% expansion. The Dallas branch of the Federal Reserve recently noted that sustained growth is apparent in the manufacturing and service sectors. Cumulatively, this strength is projected to deliver 3.4% economic growth for 2018—well above the national average.
Obviously, the Lone Star State is known for its massive swaths of land. Texas has the most farms by number and acreage in the nation. Texas also leads the country in the number of cattle and production of sheep and goat products.
Texas is the king of cotton, its leading crop. However, its production of rice, vegetables and melons shouldn’t be overlooked either.
Helping to move all of this valuable merchandise around the globe, Texas is home to the Port of Houston. This port is the largest U.S. port in international commerce and the sixth largest port in the world. As such, Texas leads the nation in export revenues.
Healthcare is a booming industry in the state of Texas. The Texas Medical Center in Houston is the largest medical center in the world. In May alone, healthcare and education added more than 8,000 jobs.
Make no mistake, Texas continues to benefit significantly when oil is strong. However, when considering the broader resources Texas has to offer, it is hard to imagine a scenario that dislodges the Lone Star State from its lofty level of productiveness. Furthermore, although there is much to quantify the strength of Texas, there is a bit of mental swagger that comes from being a Texan. No one has ever bragged about an Ohio-sized loaf of bread, but a Texan sure doesn’t mind letting you know that Texas is home.
It’s no wonder so many are eager to move here to pursue the great game of entrepreneurship.