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The dynamic Texas economy continues to add jobs across most industry sectors, though the pace has decreased somewhat of late. Given the slowing in the national economy and rising global uncertainty, it’s a positive signal that the state’s generally expansionary trend has been mostly sustained. The Perryman Group’s latest long-term forecast indicates that Texas is likely to continue to generate a substantial portion of the nation’s overall growth. There are certainly obstacles, but favorable patterns include demographics, energy, and emerging industries.
Population growth is stalling in many areas, contributing to ongoing workforce shortages, but is increasing in Texas due in part to in-migration from other states and countries (a phenomenon which is diminishing modestly in recent data). Numerous studies indicate that many of the individuals migrating to Texas are in prime working age ranges, with a substantial number of them possessing in-demand skills and training. These new residents are facilitating economic growth and generating opportunities which, in turn, can contribute to additional inflows. The state’s younger population is also a positive factor.
Texas oil and gas is crucial to meeting US and global needs. The state’s production helps ensure energy security for the United States and our allies, particularly in times of geopolitical uncertainty. Simultaneously, this industry generates jobs and investment throughout the state. Forecasts from major public- and private-sector entities (including our projections) indicate that oil and gas will be crucial to meeting growing energy demand over a long-term horizon, and will continue to be an important aspect of the state’s economy. Texas is also a leader in many other forms of our diverse energy future, including wind, solar, and hydrogen (among others).
Texas is experiencing notable expansion in several industry groups which will enhance the long-term prospects for the state economy. In particular, the emergence of life sciences industries, investment banking and securities, and various aspects of technology (such as microchips, AI, data centers, and crypto mining) are spurring impressive gains in business activity.
The state also faces daunting challenges which will materially affect ultimate outcomes. A growing population and economy will require additional water, roadways, electricity (both generation and transmission), and investments in education (among other things). A critical imperative is ensuring that young people are provided with excellent learning opportunities. Texas is better positioned than many areas, but only if students are adequately prepared for the jobs of tomorrow.
The Perryman Group’s current long-term forecast indicates Texas should see economic growth at a faster pace than the nation. We’re projecting 1.64% annual employment growth through 2053, representing a gain of 9.1 million jobs. Business fluctuations are inevitable, but the economic outlook is decidedly positive, with numerous diverse sources contributing to ongoing expansion. Stay safe!
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.
