Texas Border Business
AUSTIN, Texas – The Dallas Federal Reserve Bank recently reported in May that Texas’ economic expansion has slowed, and the business outlook has weakened. While an accurate reading of economic statistics, a broader context offers reasons for optimism, according to a newly released analysis from Texas Oil & Gas Association (TXOGA) Chief Economist Dr. Dean Foreman.
Texas’ economy led the nation’s growth for the two most recent quarters, growing at an average annual pace of 7.6% (or more than 2.5 times the U.S. average) over the latter half of 2022 per the Bureau of Economic Analysis (BEA).
“What goes up, must generally come down,” said Foreman. “A slowing expansion is both typical and healthy following periods of rapid expansion.”
Excluding the post-pandemic rebound, Texas’ past two quarters are the state’s best performance since late 2014 and early 2015–and Texas ended 2022 with a new record-high state GDP of $1.92 trillion.
A detailed look into industry drivers shows that the sources of the state’s strength are even clearer, with Texas’ real GDP achieving a record high of $1.92 trillion in Q4 of 2022, making it the fastest growing state over the second half of 2022.
Per the BEA, over 70% of real growth in the second half of 2022 was driven by oil and natural gas-related industry segments, and industry direct employment rose by 8.3% year-over-year (y/y) to 477,327 in Q4 of 2022, generating $13.8 billion in wages per Texas Workforce Commission (TWC) data.
