Texas Border Business
By M. Ray Perryman, The Economist
Texas cities are dominating national expansion. The US Census Bureau recently released estimates of population growth between July 2016 and July 2017, and Texas cities top the list both for the number of new residents and the fastest rate of growth.
San Antonio added more new residents than any city in the nation; a gain of 24,208 pushed the total population above 1.5 million. That’s an average of over 66 new people per day. (Note that these estimates are for cities rather than metropolitan statistical areas, and therefore don’t include surrounding population centers.) Dallas ranked third with a gain of 18,935, with Fort Worth fourth (up 18,664). Frisco and Austin were also in the top 15 (number 9 and 12). To have three of the top four cities and five of the top 15 is impressive, particularly given others across the nation which are larger but added fewer residents (New York, Chicago, Philadelphia, San Jose, and San Francisco, for instance).
Looking at the fastest-growing cities with population of 50,000 or more (in percentage terms), Texas claims seven of the top 15, including the top three, all suburban markets. Frisco’s 8.2% increase in population was faster than any other, New Braunfels was second, and Pflugerville was third. Georgetown, McKinney, Flower Mound, and Cedar Park also made the list. It is particularly noteworthy that Frisco was among the leaders in absolute numbers of new residents, despite being much smaller than the major cities around the country (at least for now).
The primary reason for this impressive showing is jobs. People are moving to Texas because the economy is growing and high-quality jobs are available. A significant proportion of national job creation is going on in Texas, with both cornerstone traditional industries and emerging industries expanding.
Another reason is affordability. A cost of living comparison between San Francisco and Austin, for instance, shows that a salary in Austin goes about twice as far, with everything from groceries to housing being far less expensive in Texas. Workers in such high-cost areas are looking to Texas for opportunities to improve their financial conditions. Companies also consider cost parameters in location decisions and are taking advantage of the Lone Star State’s relatively lower costs.
It is no accident that Texas is experiencing strong growth. Economic development efforts over the past decades are paying off, and companies in key industries are finding the state an excellent place to do business. Substantial growth is ongoing in both the large cities and smaller population centers surrounding them. Population expansion presents challenges and a need for additional infrastructure, educational resources, and housing. However, it’s a nice problem to have.
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group. He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.
