Facts on Texas Economy- Futuristic View 2035
In 2012, Texas garnered gross earnings of $264 billion in terms of exports more than that of California ($161.9 billion) and New York ($81.4 billion) put together.
Texas was part of Spanish colonization efforts which started in 1519. From this year until 1848, all areas of Texas were claimed by six sovereign governments. These were the Confederate States of America, the United States, Republic of Texas, Mexico, France, and Spain. When Mexico gained its independence from Spain in 1821, Texas became part of Mexico. The Mexican government permitted American immigrants to come to Texas.
By 1834, more than 30,000 Anglos resided in Texas compared to roughly 8,000 Mexicans. General Antonio Lopez de Santa Ana, who was Mexican president for 40 tumultuous years, dissolved the 1824 Constitution and invaded Texas in 1836.
However, Texas finally won the Texas Revolution in 1836 and became an independent nation. It joined the United States and became the 28th American state. During the Civil War, Texas decided to secede from the US and became an ally of the Confederates. The state was put under reconstruction after the Civil War. This created massive animosity among the Whites especially when American slaves were freed. Major industries during that time were farming and cotton-raising.
After 1870, railroad construction spurred the development of cities away from principal waterways. Timber also became a key industry as the 19th century ended. The “Oil Boom” helped improve the economic conditions in Texas. Federal legislation in the sixties ended racial segregation. Texas changed from the single party democratic state to a tightly challenged political arena until 2000 when it became an unyielding Republican stronghold.
The economy of this state continues to grow and became the second-biggest state in terms of population in 1994. The market is very broad with significant milestones in technology advancement. Socio-Economic & Political Standpoint Economy Texas boasts of one of the fastest-growing economies in the country. What are the reasons for this phenomenal growth?
Six of the leading Fortune 500 companies are in Texas
In 2012, Texas garnered gross earnings of $264 billion in terms of exports more than that of California ($161.9 billion) and New York ($81.4 billion) put together. If it were an autonomous county, it would have been the biggest economy worldwide based on Gross Domestic Product.
Texas will even be ahead of the Netherlands and South Korea. Texas earned a Gross State Product of $1. 332 trillion in 2011. This is recorded as the second highest in the U.S. Household income was listed at $48, 259 in 2010. This is number 25 in the country which is lower than the national average. However, it does not add up the low average cost of living in Texas. The truth is job progression, tax collections and even building construction permits indicate the state’s economy overshadows the national economy.
In 2013, there were additional jobs in 11 principal industries. These are the following sectors: financial; leisure and hospitality; business and professional services; transport and utilities; trade; health and education; mining and logging; construction; manufacturing; and, information. The pre-downturn employment rate hit the highest point at 10.6 million (August 2008). This figure was exceeded by another 641,400 jobs in December of last year. The real GDP increased by 4.8 percent compared to only 2.5 percent for the entire nation.
Economic development and production are characterized by real Gross State Product. It is perceived as the major gauge for the wellbeing of state economy. The term “real” means GDP and GSP values being categorized according to a particular year to show the degree of change. GSP of Texas went up by 23.5 percent compared to the United States of 16.8 percent within the period (2001 to 2010).
Why Texas is at the top?
Texas has exceptional geographic and demographic characteristic attributes that have contributed to the progress of its economy during the past decades. Border location is strategic and promotes trade. The combination of lending policies and land laws ensured that housing costs remain relatively low. The state avoided the slump in the property sector which pulled down the economies of other states. While the economy has broadened its horizons, rich oil and gas resources have remained precious assets. The prices of these prime commodities are frequently high.
Other states do not have the luxury of these industries. Texas has built a strong position both in the national and world economies. This formidable economic position has become a factor in the transformation of its political status as well as ranking in the United States. Texas now stands among the biggest economies in the world. The oil and gas industries have propelled the state into a more developed and industrialized economy. Politics The political situation in the Lone Star State is considered stable after having its own moments of discord, deep-rooted anxiety, disagreement, and abrupt change. Low taxes and low services consensus is part of the story.
After the reconstruction epoch, the Democratic Party was dominant in all echelons of state government and in the State's representation in the national government. Democratic rule was controlled by moderate white politicians advocating economic development. Republicans were not totally nonexistent during this period. Nevertheless, the Republican Party had very limited success except in 1952, 1956 and 1972.
It was only after 1980 that the Republicans started to gain momentum once again. The dimensions of Texas, its special history, and the ensuing political and social class of society have become factors in the development of this practical center.
Significant features of the political and policy conditions in Texas following the civil rights movement underscore the strength of conservatism in both parties.
There were four distinct factors such as the reasonably low level of state services maintained by a common hostility toward progressive taxation; anti-union working atmosphere; restricted environmental control; and, culturally conformist social policy in the fields of education, religion, and civil rights.
Politics in Texas have innate historical origins dating back to the historic days of the independence of Texas. Collective accord on these points has been disputed and transformed to partly during various interludes in the history of this state.
Accordingly, these trends continue to wield a great influence until the present times. At present, Republicans control majority of Texas. In fact, it is one of the predominant Republican states in this country. Yet, there are states which include Austin (the capital), El Paso and Rio Grande Valley are Democratic Party territories. Just like California, Texas is classified as a minority and majority state.
Dallas (Fort Worth)
What is important is that the Dallas economy is growing at a fairly strong rate.
In fact, it is outperforming the whole of Texas. Econiomic indicators have different data and corresponding analysis about this region.
A recent market report stated that employment in Dallas and Fort Worth has increaded by almost three percent which is faster than the growth rate of Texas (2.4 percent). Employment opportunities continue to increase in the oil and gas industry, construction sector, financial utilities, and business services.
Dallas is the ninth biggest city in the country and third largest in Texas. It is a principal hub for oil and cotton production.
It is predicted by 2035 Dallas (Forth Worth) would be of the top of nine wealthiest state in US. Top Vertical Industries in Texas Vertical industries have demonstrated a very strong performance in Texas.
Listed below are Oil and Gas Corporations
Exxon Mobil Corporation is a U.S. multinational oil and gas corporation based in Irving, Texas. It is the biggest of all vertically integrated oil companies and second-biggest publicly traded International Corporation based on revenues and market ceiling. It owns a market value of $417 billion and 2.7 percent profit. For more than 100 years, Exxon Mobil has been a leader in lubrication technology which started with the Wright Brothers’ initial flight, first launch of the space shuttle and today’s fastest and sophisticated wind turbine engines. Exxon Mobil researchers are also currently engaged in studies about nanotechnology, molecular dynamics and the like.
Valero Energy Corporation with its main office in San Antonio, Texas is the biggest refinery in the United States. This is based on “throughput capacity.” The company’s refineries produce a wide array of products such as gasoline, jet fuel, lubricants, asphalt, and petro-chemicals. It makes use of modern technologies for environmental protection such as contemporary ethanol plants, wind farm, infrared technology, low temperature oxidation, and reduction of greenhouse gas.
Conoco Philips is a transnational energy firm based in Houston, Texas. It produces natural gas and oil. Conoco Philips is the fifth biggest refinery in the whole world. The multinational has collaborated with the University of Kansas for a three-year research program related to nanotechnology. This will concentrate on the development and experiments associated with fresh technologies for the stimulation of oilfields. Hopefully, this will boost recovery and meet the increasing energy demand.
Enterprise Products partners L.P. is engaged in the business of crude oil pipelines and natural gas. The main office is in Houston, Texas. Enterprise Products acquired Gulf Terra in September of 2004. It has increased asset base from a mere $715 million to $38 billion in March of 2013.
Plains All American Pipeline L.P. is classified as a publicly-traded and (master) limited partnership engaged in the liquefied petroleum gas enterprise. The company’s headquarters is in Houston, Texas. Plains All American Pipeline transports stores and markets natural gas liquid and crude oil. It handles more than 3.5 million barrels of crude oil and gas daily.
Dell Incorporated is one of the privately-owned computer technology corporations operating in Round Rock, Texas. The company develops, markets, supports, and repairs personal computers along with related services and products. Michael Dell, chief executive officer of Dell, says that his company supports the use of nanotechnology symbolizes the dawning of a ground-breaking new are in the ability of the modern generation to control materials for the betterment of civilization.
IBM or International Business Machines Corporation maintains a big office in Dallas, Texas. This is one of the largest American global technology and consulting firm. IBM is the acknowledged leader in the field of naotechnology research. More than two decades ago, two scientists from IBM were awarded the Nobel Peace Prize in Physics for inventing the Scanning Tunneling Microscope which introduced to the world nanotechnology possibilities.
IBM continues to conduct research in NANOTECHNOLOGY and NANOSCIENCE covering multiple areas.
HP or Hewlett Packard is an American translational IT corporation with a base in Austin, Texas. HP laboratories are looking further than the traditional silicon technology and started to concenrate on nanometer scale structures together with the measurement and understanding of naotechnology properties. HP does primary research on nanoscale science. Thic encompasses the basic physics of switching with considerable emphasis on molecular scale electronics. There are also research ventures on nanoscale electronics programs, nanomechanics and nano architectonics.
Google is another American conglomerate that specializes in web-related commodities and services. Google’s main product lines include cloud computing, search, software, and web-based advertising technologies. It maintains a large office at Austin, Texas. Google has reportedly invested $100 million in areas like consumer-oriented Internet enterprises, nanotechnology, robotics, and health care.
Microsoft, which has an office in Dallas, develops, manufactures, supports, and markets computer software applications, personal computers and consumer electronic goods. Microsoft is one of the leaders in information technology solutions for employees in the global arena.
Manufacturing Kimberly Clark is an American corporation that focuses on personal care and manufactures paper-based consumer items. It has an office in Irving, Texas. For many decades, Kimberly Clark has been dependent on historical data to make forecasts. However, it overhauled this system and made substantial investments in data analytics programs which provide more visibility in real-time demand trends.
Benchmark Electronics is an Original Equipment Manufacturer and Original Design Manufacturer based in Angleton, Greater Houston, Texas. It has been in this business since 1986. It is classified as an international provider of integrated electronics manufacturing , engineering and design. It is known for the worldwide footprint of ISO-certified facilities that facilitate the manufacture of modern electronics-based goods.
Cameron International Corporation is a member of the elite Fortune 500 companies. It is also the world provider of pressure control, flow control, compression systems, processing, project management, and aftermarket services for gas and oil processing industries. It provides flow equipment products services and systems to international sectors. It is based in South Houston, Texas.
Commercial Metals Company is also one of th Fortune 500 companies with a primary office in Irving, Texas. It is vertically-integrated steel corporation that manufactures, fabricates, recycles, and trades steel products all over the world. The corporation is well aware that nanotechnology has prompted a lot of changes for the metal industries within the past few years both in current and new markets to include applications for chemicals, automotive, electronics, energy, and other sectors.
Lyondell Chemical Company is an American public multinational chemical corporation based in Houston, Texas. It was established in December of 2007 with the acquisiton of Lyondell Chemical Company by Basell Polyolefins for the cost of $12.7 billion.
Future of Texas Multinationals by 2035
No matter what happens, the economy of Texas will continue to grow in the medium and long-term leading to 2035. The same thing is expected to happen for multinational corporations operating in major cities of the lone star state. Gross state product (GSP) for Texas, which quantifies output and demonstrates the overall economic strength of the state, is expected to grow at an annual rate (compound) of more than three percent and increase further. Moreover, the contribution of Texas to national economy has already gone up by 8.7 percent more than Alaska and North Dakota which have te highest GSP in the country. It is one of the principal drivers behind the economic resurgence of the entire nation.
With multinational corporations, primarily those in the energy, oil and natural gas, as well as automation industries, at the forefront, the state is likely to play an ever-increasing role in the country’s economy beyond 2015.
An energy boom has dawned in Texas because of these companies and the explosion is expected to grow more like wildfire affecting the whole nation. This phenomenon will carry on until 2035 resulting in the addition of 3.5 million job opportunities in the domestic oil sector. Many of these opportunities will be in Texas. Capital expenditures will probably reach $5 trillion within this period. If you break down domestic oil production, this is projected at approximately 2 million barrels daily until 2020 and further than this year. Texas will be a primary beneficiary of this development.
Crude oil and natural gas production will go up in Eagle Ford, Permian Basin and Barnett (shale deposits). These are in the northern and southern parts of Texas. Meanwhile, technological advancement has helped increase energy demands so oil producers are committed to fulfill these consumer demands. These large conglomerates continue to do wonders for the state economy.
The Metropolitan Area of Austin-Round Rock-San Marcos will probably continue as one of the strongest performers nationwide. This area has established itself in multiple technology-oriented niches. The population of Austin is estimated to increase by roughly 1.2 million until 2035. There will possibly another 500, 000 jobs and 306, 000 workers during this timeframe.
The Dallas-Plano-Irving Metropolitan Division is also a potent expansionary area. The continuum of industries will surely go all-out in hiring within the next 12 years. Corporations in the oil, gas exploration and energy industries continue to benefit from the present high-priced environment as well as continuing development of oil and gas fields in Texas. This area is a great creator of economic activities. It is almost 20 percent of the state total and will likely put in $390 billion in GDP and 1.24 million work opportunities by 2035.
Fort Worth Arlington Metropolitan Division sees reasonable long-term growth. More so, the activity at Barnett Shale will be one of the most vital sources of economic stimulus. Recovery has started in 2009 and economic benefits from oil and gas field reserves will definitely be experienced during the next two decades. Aviation-related enterprises will certainly contribute to this long-term growth. Job creation is estimated at almost 500, 000 within the 2014 -2035 period. El Paso area’s development is also perceived as modest until 2035.
Fort Bliss will be the key factor since purchase of local products and services as well as military personnel spending is increasing significantly. Forecast for annual growth rate is expected at 3.35 percent while local employment can go up by 3.35 percent.
On the other hand, the Houston area is on an upward movement due to the energy, petrochemicals, refining, oil exploration, production enterprises together with professional services. The other vibrant industries include manufacturing and business entities. Some 1.44 million jobs are expected in the Houston corridor.
On the other hand, the San Antonio-New Braunfels segment is considered one of the most animated urban hubs even during the recent downturn. The most productive industries include health care, military, manufacturing, tourism, business, and professional services.
Exploration and oil production activities in Eagle Ford Shale have also generated economic progress in the area.
San Antonio can be a growth leader in the long-term period with around 500, 000 new jobs. These areas will definitely act as stimulus for advancement all over Texas. Publicly-listed and private companies will spearhead the growth of state economy for the years to come.
Texas by 2035 The long-term projection is that there will be average growth in the state of Texas that will outpace national development. Huge metropolitan centers will act as growth drivers with activities going down into the communities and rural sections across the state.
“While the national economy became stronger, some of the country's largest state economies, including California and Texas, increased at an even faster rate.
In Texas, population growth and energy production helped boost the state's overall GDP rate of 4.8%. The oil boom also contributed to the impressive 13.4% economic growth in North Dakota. These figures were based on the GDP growth figures provided by the Bureau of Economic Analysis; these are the 10 fastest growing states for 2012.
Some of the biggest economic growth on a state level came from the booming energy industry. In North Dakota, the mining industry which includes natural gas and oil extraction and contributed 3.3 percentage points to growth in the state's GDP. The biggest growth of any state in the country came in that sector. Other states also saw significant growth due to their energy industries. West Virginia's natural gas extraction contributed the second highest state GDP growth from the energy and mining sector, at 2.44 percentage points.
Why will these happen?
More and more Americans are relocating to Texas more than any other state in the country. In fact, it has three of the five fastest growing urban areas in the United States. These are Houston, Dallas and Austin.
Two years ago, exodus to Texas from 46 states reached 106,000.
During the past two decades, over 4 million Californians have gone to Texas while another one million came from the other states. More jobs are being created at the lower income range. Almost 60 percent of these opportunities right after the depression pay below $13.83. Middle-income jobs are ceasing to exist because of the expensive lifestyle. Nonetheless, incomes have not been sluggish at all.
Top earners have done exceptionally well but gains were distributed unequally. Number one recipients of earned income obtained a little more than 19 percent of household income while those within the first 10 percent acquired above 48 percent. Perhaps, among the reasons for the uptrend is automation or information technology.
There is a variety of hardware and software that develops file management, enterprise search, document management, business intelligence, and social networks. It helps businesses in various aspects of their operations. Automation created more jobs which are far more sophisticated and makes things easier for the workers.
The United States Department of Commerce revealed that in 2009, Texas was the 14th biggest economy globally. It still remains as number 14 in the whole world and continues to attract more investors globally.
“The state’s export revenue totaled $279.69 billion last year, up $14.3 billion, or 5.4 percent, from 2012.
California saw the second-largest increase, up $6.4 billion to $168 billion. Washington also was up $6.4 billion for a total of $81.9 billion. New York increased $4.8 billion to $83.99 billion, and Kentucky was up $3.19 billion to $25.3 billion.
Texas continues to set a national example for economic success because of our commitment to the conservative fiscal principles that allow businesses to thrive," Perry said in a statement. "The Texas model of low taxes, smart regulations and fair courts continues to drive the state's economy, attracting businesses from around the world and helping the state remain the national epicenter for international trade for 12 consecutive years.
In August, theInternational Trade Administration said Texas hit a record $134.4 billion in exportsfor the first half of 2013. That was up 3 percent from the same period in 2012.” See the image below:
The economy of Texas has been very strong and surpassed the rest of the nation even during the great economic downturn because of its PRO-BUSINESS CLIMATE.
This is the same reason that will bring Texas at the forefront until 2035. It has been the most “growth-friendly” state in the US for eight successive years because of practical laws, low taxes, high-quality labor force and pleasurable living conditions. The Government’s Bureau of Economic Analysis placed Texas at a regional price uniformity of 97.1. This is a measurement of the price point of merchandise in a particular area. It is a little lower than the national mark of 100 and much lower as against California’s 114.8. The per capita income of Texas is higher compared to that of California and almost as high as New York.
Real Estate Market Texas is a lucrative property market because residential homes are very affordable and land is cheap. In other words, housing is very inexpensive. A standard house in Brooklyn, New Jersey will cost more than $500,000 and this cost is still increasing. Most of these homes are condo units or apartments and not stand-alone domiciles. These units do not have luxurious fixtures.
On the other hand, a newer and better house (bungalow) I sold at only $130, 000 in Houston, Texas. Aside from the low cost of residential properties in Texas, the cost of living is also relatively low. This is due to low-priced transportation fuel,economical produce, and low-priced labor. It has a higher capita income compared to California while the adjusted living cost has almost acught up with upscale New York.
Texas owns the third-highest average income in the United States next to Virginia and Washington while New York is far below at number 36. One of the main reasons why the price of real estate in Texas is very low is that it does not have the harsh land-use ceiling that other states like California have.
Houston and Dallas, which are both in Texas are in the top two of the list of leading homebuilding markets in the United States.
The others from Atlanta to Charlotte are far behind with only 14, 800 units (third place) while the lowest is at 8,970.