Texas Border Business
Although Texas has been faring somewhat better than most areas, the state is not immune to the national and global economic slowdown. Current challenges are affecting key industries and the pace of hiring, but expansion is expected over a long-term horizon. The Perryman Group’s latest projections indicate that the Texas economy is well positioned to return to more significant growth in the coming decades.
Despite some recent sluggishness, Texas has been experiencing employment gains at a pace significantly faster than the nation, and the state’s unemployment rate remains somewhat lower. Growth will be boosted by the younger population and in-migration from other states and nations and the resulting more favorable position in the future workforce. However, restrictive immigration policy has the potential to slow gains, and sensible reform is needed.
Another positive pattern is that Texas has attracted far more major corporate locations, expansions, and significant investments than any other state every year for well over a decade. With this increased activity across a spectrum of traditional and emerging industries, the economy is poised to reap benefits for many years.
Texas has strategic advantages and momentum in several key growth segments, including financial services, life sciences, AI and data centers, diverse energy sources, and advanced manufacturing. These opportunities can only be optimized by meeting essential requirements in education (especially), power, water, and infrastructure. A growing population and economy will inevitably pose ongoing capacity challenges.
Exports are a source of growth in business activity, and Texas is the nation’s leading export state by a wide margin, though current trade issues and policies such as tariff increases have the potential to slow the pace of gains. In addition, the energy sector is dealing with relatively low oil prices due to sluggish demand and higher production in other areas (including OPEC+). These factors are likely to be transitory, with improved prospects anticipated in the decades to come.
The Perryman Group’s current long-term projections for Texas indicate economic growth at a somewhat faster pace than that of the US as a whole. Real gross product is forecast to expand at a 3.27% annual pace, and wage and salary employment is projected to grow by nearly 8.9 million net new positions, an increase of 1.57% per year over the next three decades.
While there remains the short-term potential for further slowing in light of recent policy actions and associated uncertainty, long-term expectations continue to point toward moderate expansion. Performance could be further enhanced through greater clarity in trade policy and improvement in processes for responsible legal immigration. On balance, though business fluctuations are unavoidable, the US economy is well positioned for long-term expansion, with Texas likely to continue to be a growth leader. 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 over 3,000 clients over the past four decades.
