Texas Economic Overview

INTRODUCTION  Mission Control Center at NASA Johnson Space Center in Houston With more than 24 million residents, Texas ranks second in the nation in both population and gross state product (GSP)—its GSP of $1.09 trillion is similar to the gross domestic product of Canada or India. Its robust and diverse economy is based on sectors ranging from abundant natural resources, including oil, high-tech and space industries, tourism, and the film industry. The average per-capita income in Texas is roughly $37,000. The government employs some 1.9 million workers, followed by the wholesale and retail trade, at 1.6 million, and education and health services, at 1.3 million. More Fortune 500 companies have their headquarters in Texas than in any other state. ECONOMIC HISTORY Early settlers in what would eventually become the state of Texas cultivated farms and raised cattle as part of Mexico, following the end of that country’s War of Independence in 1821. After a period of self-rule as a republic, Texas joined the Union in 1845 as a slave state—some 30 percent of its population were slaves who worked on its cotton plantations and in other agriculture. As a member of the Confederacy, the Texas economy suffered during Reconstruction following the end of the Civil War in 1965, as it adjusted to the abolition of slavery. Cowboys herding cattle across the plains to proliferating railroad shipping points became a common sight during the two decades after the Civil War. German and Czech immigrants, including businessmen and skilled artisans, were attracted to central Texas and further swelled the population of the state. The discovery of oil in Spindletop in 1901 transformed the state, and many fortune seekers flocked to Texas to dig wells. The state was mostly rural at that time, with agriculture, cattle ranching, and oil as the main industries. During the 1920s, irrigation projects increased the agricultural output of Texas, but the Great Depression of the 1930s caused widespread unemployment, and a drop in prices for cotton and livestock caused farmers and ranchers to suffer as well. Before and during World War II, military bases were built and expanded, which boosted the economy as it provided supplies for large numbers of service personnel training in the state. Numerous major military installations still exist in Texas. Nearly 79,000 prisoners of war, mostly German, held in 14 camps were put to work on farms to replace Texan workers who had gone to serve in the war. After the war, Texas expanded and modernized its system of higher education. Texas Instrument’s invention of the integrated circuit, successfully tested in 1958, helped usher in the semiconductor and electronics age. In the early 1960s, the construction of NASA’s Manned Spacecraft Center in Houston (later named after Lyndon B. Johnson) led to a proliferation of high-tech and computer industries nearby, and stimulated the renewed growth of the state’s universities. AGRICULTURE Texas Cotton Harvest With nearly 250,000 farms, Texas has the most agricultural acreage in the country. The total value of agricultural products sold annually is some $21 billion, of which livestock accounts for about $14.4 billion and crops add nearly another $6.6 billion. The leading livestock products in Texas are cattle and calves, at $10.5 billion (ranking first in the country), followed by poultry and eggs at $2.1 billion, and milk and dairy products at $1.2 billion. In addition, Texas ranks first in sheep production, at $107 million. Top crops are grains, dry beans, and dry peas at $2.4 billion. Texas also ranks first in cotton, at $1.8 billion. Around $1 billion of hay is also produced, as well as $194 million worth of rice and $185 million worth of peanuts. BANKING AND FINANCE Texas has 326 state-chartered banks, which are regulated by the Texas Department of Banking. These banks have total assets of $174 billion, and when added to the other 284 commercial banks that are not state chartered, total assets are $258 billion. Some 635 FDIC chartered banks operate in the state, with total assets of $347 billion. Roughly 646,000 employees work in the financial activities sector. COMMUNICATIONS Almost 150 newspapers are published in Texas, and 112 television stations and 847 radio stations broadcast there. There are some 160 companies in the communications equipment industry in Texas, which manufacture telephone, radio and television broadcasting, and other communications equipment. These companies employ some 12,000 workers who make products worth some $8.3 billion. Both Nokia and Motorola have operations in Fort Worth. CONSTRUCTION The Texas construction industry employs roughly 615,000 workers, a drop of 62,000 from April 2008, when it was at its peak before the worldwide economic crisis. Nonresidential construction spending was $54 billion in 2007, and contributed a total of $37 billion to the gross state product. The average annual wage for construction workers in the state is $46,700, and most (87 percent) of the 41,000 construction companies in Texas employ fewer than 20 workers. EDUCATION Baylor University in Waco Some 4.7 million students are enrolled in 8,226 primary and secondary public schools in the state; they are taught by approximately 322,000 teachers. The general fund to pay for education has annual revenues of $33 billion, and expenditures of $31 billion. The average expenditure per student is $6,834 annually. Aside from six state university systems, Texas has four independent public universities. The University of Texas has about 141,000 undergraduates, 80,000 faculty and staff members, an operating budget of $10 billion, and an endowment of $13.2 billion. The Texas A&M University System has roughly 103,000 students, an endowment of $6.6 billion, and conducts around $600 million worth of research annually. The Texas Medical Center in Houston is the largest medical center in the world, with more than 33,000 students and 73,600 employees. It conducts $1 billion worth of research annually. ENERGY Green Mountain Energy Wind Farm Near Fluvanna Texas is the top crude oil producing state in the country, and also produces more petroleum, natural gas, and electricity than any other state. It consumes more energy than any other state as well, accounting for around 10 percent of total U.S. energy use. Most (44 percent) of the electric power in the state is generated by coal, followed by natural gas (42 percent), nuclear energy from two nuclear power plants (11 percent), and petroleum and renewable energy, at one percent each. There are 27 petroleum refineries located in the state, which are capable of processing more than 4.7 million barrels of crude oil daily. Exxon and Mobil have headquarters and facilities in Texas. With more than 2,000 wind turbines in west Texas alone, the state leads in wind-power generation capacity, and its Horse Hollow Wind Energy Center is the largest wind-power facility in the world. The largest energy-consuming sector of the state economy is industry, followed by transportation. ENTERTAINMENT In 2006, the media industry in Texas, including films, commercials, and television shows, spent around $330 million. In the past decade, the movie industry has brought around $1.2 billion to the state, which ranks third, after California and New York, in film production. In 2009, the Texas Motion Picture Alliance gave out more than $9.7 million in grants and created 2,082 jobs. Roughly $55.8 million in taxes are generated by the industry, $33 million of which goes to cities and counties, while $22.8 million goes to the state. INSURANCE Around 68 percent of employers in Texas do not provide health insurance coverage, due to the high cost. The state ranks last for health coverage, as about a quarter of the population has no coverage. Property-casualty insurers employ more than 39,000 people in the state at an annual total payroll of $2.8 billion. State premium taxes bring more than $1.4 billion to the state, and property-casualty insurers each year pay out some $8.2 billion to car owners, $5.5 billion to homeowners, and $12 billion to businesses to cover them for losses incurred. MANUFACTURING Schlumberger Limited is the Leading Oilfield Services Producer Roughly 822,000 people are employed by 23,589 manufacturing firms in Texas for a total annual payroll of $33.5 billion. Nearly 90,000 jobs have been lost in the sector since 2008. Texas ranks second in the country, after California, in manufacturing, producing a total of $385.5 billion worth of goods. The oil industry is the largest industrial employer, with 11.5 percent of the state’s manufacturing jobs, but industrial machinery and equipment is the industry with the most manufacturing plants. More than 1,200 chemical manufacturing plants, including seven owned by Dow Chemical, operate in the state. Houston ranks first in the country as the city with the most manufacturing plants (approximately 4,000). MINING AND EXTRACTION Texas ranks third in the U.S. for mining employment with some 23,700 miners earning an average annual salary of $50,000, for a total annual payroll of $1.1 billion. The 770 mining operations in Texas extract $3.8 billion of minerals, metals, and fuel products. The coal-mining sector employs 4,400 miners who produce $880 million worth of coal. Some 2,400 metal miners produce $1.2 billion worth of metals, and 16,900 nonmetallic-mineral miners produce $1.9 billion worth of minerals. NONPROFIT Texas Children's Hospital in Houston More than 115,000 nonprofit/tax exempt organizations operate in Texas, of which around 47,000 are charitable organizations, 19,000 are educational organizations, and 17,000 are religious organizations. Total assets reported by these organizations are $250 billion, and total annual income reported is $153 billion. The highest amount of assets reported by one organization is $17 billion, the highest income reported by one organization is $9 billion, and the average annual income is $3.8 million. RETAIL Texas retail sales add up to more than $403 trillion annually. There are 36,000 food operations in the state, which employ some 775,000 workers and have sales of $35 billion. There are roughly 1,300 new-vehicle dealerships in Texas with a total of 94,000 employees, who earn an average of $51,000 a year for a total annual payroll of $4.7 billion. Total sales are $53.8 billion. Walmart is a significant presence in Texas, as it is in many states, with almost 300 supercenters, 40 discount stores, and 32 neighborhood markets. Around 147,000 people are employed by Texas Walmart stores, which spend a total of $36.8 billion for merchandise and services with 4,700 suppliers in the state. Walmart collects more than $1.5 billion annually in state sales tax and pays more than $255 million in state corporate taxes. TECHNOLOGY Images of Rhea, Saturn's Second Largest Moon, Processed by Lunar and Planetary Institute in Houston Texas ranks second in the country in the number of high-tech establishments and workers. Some 1,200 companies employ a total of 110,000 workers at an average annual salary of around $93,000. Total investment capital is $1.9 billion, and some $35 billion worth of computer and electronics equipment was exported in 2008. Texas ranks in the top 10 states for the number of biotechnology companies and scientists employed. More than 1,000 biotechnology companies, biomedical research firms, medical manufacturing companies, and universities and research facilities are located in the state, with a workforce earning an average annual salary of $80,000. Around $85 million has been allocated from the Texas Enterprise Fund for biotechnology-related projects in order to attract new businesses and jobs to the state, and the Texas Emerging Technology Fund has awarded more than $130 million for biotechnology-related projects. Biological, agricultural, environmental, and medical sciences account for $2.29 billion of the research and development expenditures of $3.31 billion at Texas institutions of higher education. The Southwest Research Institute employs more than 3,000 workers and has revenues of more than $360 million. The Southwest Foundation for Biomedical Research employs more than 400 workers and has a $55 million annual budget. Texas has more than 150 pharmaceutical manufacturing companies employing more than 10,000 workers, as well as 1,800 medical research, development, and testing laboratories that employ more than 52,000 workers. Within seven years, over 1,000 pharmaceutical-related patents were awarded to Texas scientists. The pharmaceutical and medicine manufacturing sector prepares some $4 billion of products annually. In addition, more than 1,200 medical equipment companies operate in the state, producing more than $3 billion worth of equipment. TRANSPORTATION Texas has the largest highway and railway systems in the country. The Lone Star State has roughly 80,000 miles (128,750 km) of public highways. There are more airports in Texas than any other state, with the Dallas–Fort Worth International Airport (DFW) the second largest in the country and fourth largest in the world. DFW handles around 57 million passengers each year and employs 60,000 full-time workers at an annual payroll of nearly $8 billion. The airport’s total economic output is over $16 billion. More than 660,000 tons of cargo are handled annually by the airport, which Air Cargo World magazine has called "the best cargo airport in the world." TRAVEL AND TOURISM The Alamo in San Antonio Texas hosts some 140 million domestic tourists annually producing a $24 billion tourism industry. Direct travel industry employment is nearly half a million workers, with an annual total payroll of $17 billion. Travel and tourism also generates $4 billion worth of state and local taxes. The most popular historic site in Texas is the Alamo, located in San Antonio. Other attractions are the Odessa Meteor Crater and Museum, Dinosaur World, Canyon of the Eagles, Hertzberg Circus Museum, and the Dr. Pepper Museum, where the invented-in-Texas soft drink was bottled from 1906 to the 1960s. SPECIAL INDUSTRIES The automobile manufacturing sector is a strong presence in Texas, with assembly plants of major automobile manufacturers such as General Motors, Toyota, and Chrysler. More than $10 million from the Texas Enterprise Fund has been provided for automobile manufacturing-related projects to create more than 1,600 jobs. Around 34,000 people are employed by automotive manufacturers in Texas, at an average annual salary of $47,000. GM has been operating in Texas for more than 50 years and spends around $280 million on annual payroll for an estimated 2,400 employees. Toyota’s plant employs around 2,000 workers at an annual payroll of $52 million. -World Trade Press