Texas Border Business
Even with current challenges and uncertainty, our latest projections call for significant growth in the Texas economy over the next five years. The current environment involves notable potential for volatility, but the state is well positioned for ongoing expansion. (We’ve discussed many of the key patterns affecting performance in recent columns which are available on our website if you’d like more detail.)
Although the pace of growth was slower than in previous years at both the national and the state level, Texas was the top state in terms of numeric population growth from July 2024 to July 2025. Some 391,240 new residents were added – about 1,072 new Texans per day. Along with population growth, Texas has gradually improved in educational attainment levels over the past decade. This combination will help meet the need for workers.
Texas captured its 14th straight Site Selection magazine’s Governor’s Cup, awarded to the state that attracted the most major job-creating business location and expansion projects over the past year. Two additional awards to the state resulted in a “Triple Crown” of economic development accolades. Recent headlines indicate that 2026 is likely to be another positive year. In addition to strong growth in financial services and the opening of the TXSE, major investments in other areas have been announced or are underway.
Texas is emerging as a primary destination for massive data center projects, which provide the infrastructure necessary to support the AI boom. Approximately one-fourth of all new activity (around 140 projects) is presently ongoing in the state. We’ve analyzed dozens of them, and they are game changers for local economies. As with any major construction endeavor, there can be short-term disruptions during development, and there have been some past examples of poorly conceived projects. With proper planning, however, data centers represent a significant opportunity for quality jobs and tax revenue to be used to meet local needs.
The conflict in the Middle East sent oil prices surging (at least temporarily). Higher oil prices clearly bring certain benefits to Texas, but they are somewhat concentrated by industry and geography (though the vast supplier network stretches across the state). The ultimate net effect will only be determined once the still-volatile crisis has subsided.
Our most recent forecast calls for an increase in Texas wage and salary employment of 1.78% per year through 2030, resulting in a total gain of almost 1.4 million. If should be noted, however, that current headwinds indicate that much of this expansion will be deferred into the later years of the projection horizon. The current environment is replete with challenges, and the path will likely be uneven, but growth potential over the next five years and beyond is substantial. Stay safe!
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of more than 3,000 clients over the past four decades.
