Economy of Texas

Source: Wikipedia, the free encyclopedia.

Economy of Texas
Statistics
GDP$2.4 trillion (2022)[1]
GDP per capita
$78,455 (2022)
Population below poverty line
10% (15% considering cost of living)[2][3]
0.474[4]
Labor force
15,500,000 (January 1, 2022)[5]
Unemployment4.0% (March 2023)[6]
Public finances
Revenues$269.7 billion (2023)[7]
Expenses$258.8 billion (2023)[7]
  Texas unemployment rate, 1976–2021
  US unemployment rate
Texas counties by GDP 2021

The economy of the State of Texas is the second

in exports—more than the exports of California ($175 billion) and New York ($100 billion) combined.[10][11][12]

Texas is ranked as the 8th largest economy among nations of the world by nominal GDP, ahead of Canada, South Korea, Russia, and Australia.[13]

In 2019, Texas had a median household income of $61,874.[14] As of August 31, 2022 Texas had a total of $64.40 billion in state debt outstanding, including both general obligation and revenue debt.[15][16] Texas has the second largest population in the country after California.[17]

History

Texas ($2.4 trillion) compared to other countries. GDP is in the same range as France, Canada and Russia.
Boom periods of the four major industries that built the early Texas economy

Historically four major business enterprises shaped the Texas economy prior to World War II: cattle and bison, cotton, timber, and oil.[18] The first enterprise to enjoy major success in Texas was cattle and bison. In the early days of Anglo-American settlement, furs and hides were the major products derived from cattle. Beef was not particularly popular in the United States. However, Texas entrepreneurs soon pioneered the beef industry, and demand steadily increased. The cattle industry enjoyed its greatest financial success in the later 1870s and 1880s.

Cotton production, which had been known in Texas since Spanish times, gradually increased throughout the 19th century. By the early 20th century, Texas had become the leading cotton producer in the nation. By the 1920s, the cotton industry was past its peak, as government regulation and foreign competition took their toll.[19]

Forests

Main article: History of Texas forests

The forests of Texas have been an important resource since its earliest days and have played an important role in the state's history. The vast woodlands of the region, home to many varieties of wildlife when Europeans first arrived, provided major economic opportunities for early settlers. They today continue to play an important role economically and environmentally in the state.

The densest forest lands lie in the eastern part of the state. In particular the Big Thicket region, just north of Houston and Beaumont, has historically been home to the most dense woodlands. The Big Thicket was mostly uninhabited until heavy settlement from the U.S. began in the mid-19th century, and was even used as a refuge by runaway slaves and other fugitives. The Rio Grande valley in South Texas was home to a large palm tree forest when Spaniards first arrived, though today very little of it remains.

The development of railroads in the eastern part of the state during the mid-19th century led to a boom in lumber production in the 1880s. This era of financial success lasted approximately 50 years finally coming to an end as Texas's forests were decimated and the Great Depression dropped prices.[20]

Oil boom

Main article: Texas oil boom

In 1901 the Gladys City Oil, Gas, and Manufacturing Company struck oil on Spindletop Hill in Beaumont. Though petroleum production was not new, this strike was by far the largest the world had ever seen. The find led to widespread exploration throughout Texas and neighboring states. By 1940 Texas was firmly established as the leading oil producer in the U.S.[21]

The headquarters of Texas Instruments

Texas remained largely rural until World War II though the success of the petroleum industry rapidly expanded the economy with heavy industry of many types taking root. The second world war created tremendous demand for petroleum and a variety of products that Texas was in a unique position to provide. By the end of the war Texas was one of the leading industrial states and the population had become predominantly urban. Additionally the economy had diversified sufficiently that, though petroleum was still the largest sector by the end of the war, the business community in the state was truly diverse.

The Texas economy today relies largely on information technology, oil and natural gas, aerospace, defense, biomedical research, fuel processing, electric power, agriculture, and manufacturing.

Fortune 500 companies
based in Texas for 2021
according to revenues
with State and U.S. rankings
State Corporation US
1 McKesson 7
2 ExxonMobil 10
3 AT&T 11
4 Dell Technologies 28
5 Phillips 66 48
6 Valero Energy 53
7 Sysco 60
8 Oracle 80
9 Energy Transfer 81
10 USAA 87
11 Enterprise Products 105
12 HP Enterprise 106
13 CBRE Group 122
14
Plains GP Holdings
 127
15 Baker Hughes 140
16 D.R. Horton 148
17 ConocoPhillips 156
18 Kimberly-Clark 158
19 Tenet Healthcare 167
20 American Airlines Group 174
21 Occidental Petroleum 183
22 Fluor 196
23
Waste Management
 202
24 Texas Instruments 210
25 Halliburton 211
26 Core-Mark Holdings 224
27
Jacobs Engineering Group
 225
28 Charles Schwab 251
29 Kinder Morgan 262
30
Vistra
 274
31 Quanta Services 278
32
HollyFrontier
 279
33 EOG Resources 285
34 Group 1 Automotive 286
35 Cheniere Energy 328
36 Southwest Airlines 336
37 CenterPoint Energy 342
38 Builders FIrstSource 350
39
Yum China Holdings
 363
40 Targa Resources 364
41
Westlake Chemical
 388
42 Pioneer Natural Resources 428
43 NOV 457
44 Huntsman 460
45
Crown Castle International
 467
46 KBR 470
47 Academy Sports and Outdoors 475
48 Celanese 477
49 Commercial Metals 492
50 Michaels 506
Further information:
List of Texas companies

Source: Fortune[22]

Exports

Houston Ship Channel

In 2014, for the thirteenth year in a row, Texas led the United States in export revenues. Texas exports for 2008 totaled $192.2 billion.

Dallas/Fort Worth International Airport as "the best air cargo airport in the world".[25] The ship channel at the Port of Houston is the largest in the U.S. in international commerce and the sixth-largest port in the world.[26]

Taxes

According to the Tax Foundation, Texans' state and local tax burdens are among the lowest in the nation, 7th lowest nationally, with state and local taxes costing $3,580 per capita, or 8.7% of resident incomes.[27] Texas is one of only 7 states not to have a state income tax.[27][28] The state sales tax rate, 6.25%, is above the national medium, with localities adding up to 2% (8.25% total).[29] Texas does have a "back to school" sales tax holiday once a year (generally around the first weekend in August) on clothing and footwear under $100.[30]

As for Texas's business tax climate, the state ranks 8th in the nation.

Property taxes are exclusively collected at the local level in the state, and are generally at rates above the national average.[27] As a whole, Texas is a "tax donor state" with Texans receiving back approximately $0.94 per every dollar of federal income taxes collected in 2005.[27]

Tax burden

Texas is one of the seven

partnerships, are subject to a franchise tax.[31]

The state sales tax is set at 6.25 percent.[32] Cities are allowed to impose an additional 1% tax, and additional taxes not to exceed 1% may be approved by voters for any combination of county sales tax, transportation districts, economic development, and/or crime prevention. The average sales tax in Texas amounts to 8.25 percent. The state determines the items subject to sales tax, which all other entities must follow. Motor vehicle sales are subject only to the 6.25% state sales tax. Food, except for prepared food, and non-prescription medicines are among the major items exempt from sales tax.[citation needed]

While

Texas Constitution specifically prohibits a state property tax. For real property, counties, cities, and school districts (along with other special districts, such as for a community college or public hospital) can also impose taxes. All property is assessed uniformly throughout the county via the county "appraisal district", and taxes are assessed based on 100% of the property's assessed value. While larger personal property items such as cars, boats, and airplanes can be subject to local taxes as well, it is far less common.[citation needed
]

Industries

Agriculture

Offloading freshly harvested cotton into a module builder. Previously built modules can be seen in the background.

Texas has the most farms of all United States both in terms of number and acreage. Texas leads the nation in number of cattle, usually exceeding 16 million head. The sprawling 320,000 deeded acres (130,000 ha)

cattle ranches in the Southwestern United States
.

Cultivation of

clay plains near Vernon.[33]

Texas leads nationally in production of sheep and goat products. Texas is king of cotton, leading the nation in cotton production, its leading crop and second-most-valuable farm product.[34] Texas is a leader in cereal crop production. Three counties in the state—Colorado, Wharton and Matagorda—take advantage of water from the Lower Colorado River Authority to grow rice and are responsible for about 5% of annual U.S. rice production.[35] Texas is also a large producer of watermelons, grapefruits, and cantaloupes.[34]

The

groves.[37]
: 437 

Fire ants (

invasive agricultural pest here.[38]

Cotton root rot of many crops, including grape.[39]
It is so associated with this state that it is also called Texas root rot.

In the 1990s

Poteet, however by 2004 imported strawberries had competed almost all strawberry production out of the state.[41]

Texas and Arkansas are among the higher producers of

Circulifer tenellus (Baker).[42]
: 3 

Texas is the westernmost limit of commercial

Linnaeus)), and leaffooted bugs (various Leptoglossus spp.).[42]
: 5 

Texas is one of the largest producers of onions.[42]: 5  Production here suffers from onion thrips (Thrips tabaci (Lindeman)) and onion maggots (Delia antiqua (Meigen)).[42]: 5 

Texas is one of the major growers of

whiteflies.[43] AgriLife also makes recommendations for fungicide, insecticide, and herbicide control of all these in this crop, and for common weeds.[43]

AgriLife provides many other commercial grower guides:

Swiss chard, tomato, and turnip.[43]

Although the Asian cockroach (

Pycnoscelus surinamensis) is not proven to be a major pest but data is lacking.[42]: 57  It should not be confused with the Indian cockroach (P. indica) which does not occur here.[42]
: 57 

Flea beetles, specifically the redheaded (

Gulf Coast.[42]
: 83 

Aeronautics

Headquarters of American Airlines and AMR Corporation in Fort Worth
Southwest Airlines headquarters in Dallas

National Aeronautics and Space Administration
(NASA), is located in Houston. It is a leading hub for the Aeronautics industry. The National Space and Biomedical Research Institute is headquartered in Houston.

Dallas/Fort Worth International Airport, located nearly equidistant from downtown Dallas and downtown Fort Worth, is the largest airport in the state, the second-largest in the US, and the fourth-largest in the world.[44] In terms of traffic, DFW is the busiest in the state, the third-busiest in the nation, and the sixth-busiest in the world. [citation needed] The airport serves 135 domestic destinations and 40 international. DFW is the largest and main hub for American Airlines
, one of the world's largest in terms of total passengers-miles transported and passenger fleet size.

Texas's second-largest air facility is Houston's George Bush Intercontinental Airport (IAH), the largest hub of United Airlines. IAH offers service to the most Mexican destinations of any U.S. airport. IAH is currently ranked second among all U.S. airports with scheduled non-stop domestic and international service.

Headquartered in Fort Worth,

Bell Helicopter
is headquartered in Fort Worth as well.

Defense

Texas is home to two of the United States Army's largest facilities (in terms of geographic size), Fort Cavazos in Central Texas near Killeen and Fort Bliss near El Paso. In addition, Fort Sam Houston in San Antonio is home to the Brooke Army Medical Center, one of the Army's major hospitals and its only burn facility, and the Corpus Christi Army Depot in Corpus Christi, Texas is home to the world's largest helicopter repair and maintenance facility.

The United States Air Force operates several bases in the state – Sheppard (Wichita Falls); Dyess (Abilene); Goodfellow (San Angelo); Laughlin (Del Rio); Lackland and Randolph (San Antonio); and Ellington Airport (Houston).

The

NAS Kingsville
.

Defense contracting

Texas (specifically Dallas and Houston) has a large number of defense contractors which creates sizable employment for the state.

Two divisions of Lockheed Martin have their divisional headquarters in the DFW area –

F-22 Raptor) and Lockheed Martin Missiles and Fire Control in Grand Prairie
.

Fort Worth is also the home of

V-22 and the H-1, on which final assembly is performed in Amarillo. Furthermore, three major defense service contractors (DynCorp, AECOM, and DXC Technology
) have substantial operations in Fort Worth.

Other major defense contractors with DFW presence include

L-3 Communications (plants in Arlington, Carrollton, and Greenville; also has a facility in Waco), BAE Systems (facility in Fort Worth), Leonardo DRS (Dallas), Hewlett Packard Enterprise and NTT Data (Plano), Alliant Techsystems (facility in Fort Worth), and Elbit Systems (facility and US headquarters in Fort Worth). The Defense Contract Audit Agency
maintains its Central Region office in Irving.

Outside the DFW area, KBR (the former Halliburton subsidiary) maintains its headquarters in Houston, while the Southwest Research Institute is located in San Antonio. BAE Systems also manufactures the Family of Medium Tactical Vehicles at its facility in Sealy, Texas.

Computer technology

Hewlett-Packard United States offices near Houston, previously the Compaq headquarters
Dell headquarters in Round Rock

Texas is one of the major hubs in the U.S. for development of computer components, systems, software and information infrastructure. Austin, Dallas, and Houston are the major centers for this industry in Texas. The Austin area is often nicknamed "Silicon Hills" because of the concentration of semiconductor design companies including AMD, Cirrus Logic, Freescale Semiconductor, Intel and Silicon Labs. Dell's headquarters is located in the city's suburb, Round Rock, and major offices for Google, Facebook, EA Games, and Apple are also open in the Austin area. Austin is also the home of the Texas Advanced Computing Center at The University of Texas at Austin. Dallas is the birthplace of the integrated circuit.[citation needed]

The North Dallas area is called the "Telecom Corridor" or the "Silicon Prairie"[

Rackspace, as well as computing pioneer Datapoint. Harris County-based Compaq,[46] was once one of the world's largest computer companies.[citation needed] After Compaq's merger with Hewlett-Packard, the new owner currently employs more employees in the Houston area than anywhere else in the world.[citation needed
]

Energy

Main article: Energy in Texas
An oil well

Energy is a major component of the state economy. Texans consume the most energy in the nation both in per capita and as a whole.[47] The state is also the nation's largest energy producer, producing twice as much energy as Florida, the state with the second-highest production. It is also the national leader in wind power generation, comprising about 28% of national wind powered electrical production in 2019. Wind power surpassed nuclear power production in the state in 2014.[48]

Tourism

The San Antonio River Walk

Texas has a large tourism industry. The state tourism slogan is "Texas: It's like a whole other country." Tourists might enjoy

Fort Worth western attractions. Galveston, Corpus Christi, and Padre Island are some of the popular Texas resort areas located on the Gulf of Mexico. Houston is Texas's leading convention city along with its Southern
culture. Dallas is also one of the nation's leading convention cities as well as San Antonio. Professional and college sports are dominant in both Dallas and Houston.

Entertainment

Texas is a top filmmaking state. Austin is now one of the leading filmmaking locations in the country. The exteriors for the popular soap opera Dallas were filmed on Southfork Ranch, a location at Parker, Texas. From 1995 to 2004, more than $2.75 billion was spent in Texas for film and television production.

The

Hollywood studios are relocating parts of their production divisions to the Austin, Houston, and Dallas areas.[49]

The media conglomerate iHeartMedia is based in San Antonio, Texas. Video game developers Robot Entertainment, Gearbox Software, and 3D Realms are based in the Dallas Fort Worth area, while Retro Studios, Armature Studio, and Ghostfire Games are based in Austin. Cinemark Theatres which is one of the largest movie theater chains is also based in the Dallas Fort Worth area.

Healthcare

Main article: Healthcare in Texas

Healthcare is a growing industry in the state of Texas. The

The University of Texas M.D. Anderson Cancer Center, a global leader of cancer research and treatment.[52] The medical complex also hosts a private medical college, The Baylor College of Medicine.[53]

The

Texas A&M Health Science Center,[citation needed], and Texas Tech University Health Sciences Center
in Lubbock and El Paso provide the state with a total of nine centers of medical research.

Wealthiest places in Texas

Main article:
Texas locations by per capita income

The following list contains per capita incomes of the 32 wealthiest locations in Texas:

  1. Southlake, Texas – $176,427
  2. Barton Creek – $110,504
  3. Westover Hills – $98,573
  4. Highland Park – $97,008
  5. Midland – $93,369
  6. Hunters Creek Village – $88,821
  7. Bunker Hill Village – $86,434
  8. Hill Country Village – $77,374
  9. Mustang – $75,692
  10. West University Place – $69,674
  11. Hilshire Village – $66,620
  12. Olmos Park – $65,697
  13. The Woodlands – $64,430
  14. University Park – $63,414
  15. The Hills – $61,363
  16. Southside Place – $57,021
  17. West Lake Hills – $55,651
  18. Onion Creek
    – $54,758
  19. Tiki Island – $54,611
  20. Parker – $54,099
  21. Lakeshore Gardens-Hidden Acres – $52,512
  22. Rollingwood – $52,280
  23. Hedwig Village – $52,153
  24. Lost Creek – $52,147
  25. Heath – $51,049
  26. Colleyville – $50,418
  27. Shavano Park – $47,705
  28. Sugar Land – $47,597
  29. Bellaire – $46,674
  30. Lakeway – $45,765
  31. Ransom Canyon – $45,675
  32. Alamo Heights – $45,640

See also

References

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External links

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