|WACO, April 26 - How Texas is doing compared to other areas is a question I am frequently asked. It’s also a topic I have touched on in columns, speeches, conversations, and many other contexts.
The short answer is that Texas is doing very well relative to most parts of the country. In fact, the degree to which the Lone Star State is beating national averages is striking.
The differential in the rate of job creation between the nation as a whole and Texas illustrates the state’s strong performance. From January 1990 to January 2013, total nonfarm employment (seasonally adjusted) in Texas grew by 57.8 percent. During the same period, national employment expanded just 23.5 percent.
Looking at the past ten years (January 2003 to January 2013) covers the period of expansion through the mid-2000s, the recent recession, and subsequent recovery. Over that period, Texas employment was up by 17.5 percent, while the national total gained only 3.4 percent.
Since the trough of the recession in December 2009, Texas has added about twice the number of jobs as were lost during the downturn. In addition, the state’s rate of job expansion has almost doubled that of the United States as a whole, with employment growth of 7.9 percent (since January 2010) compared to 4.2 percent for the nation.
These various time frames illustrate the fact that the state is far outpacing the rate of growth of the nation as a whole. Moreover, through the downturn and recovery, Texas’ pace of expansion in employment was five times the sluggish US rate.
A natural next question is whether this advantage is one we can sustain. Again, the short answer is that I think we will continue to do very well in terms of economic growth and job creation. One point in our favor is that we’ve done a good job establishing a base in industries which are growing. These range from biotechnology and cutting-edge biosciences research to video gaming development to pharmaceuticals research and commercialization. They also include everything from factories producing cheese in the Texas panhandle to heavy equipment near the Gulf Coast.
We’re making good use of our natural resources, with oil and gas exploration and development spurring strong activity in both traditionally energy-centered areas like the Permian Basin and new developments such as the Eagle Ford Shale. An export market for natural gas is also developing through the construction of facilities which convert natural gas to a liquid form suitable for sending to markets around the globe.
In addition, there have been concerted past efforts to ensure that we are doing what we can to optimize economic development. This has been the subject of past columns, but statewide initiatives such as the Texas Enterprise Fund and the Emerging Technology Fund have made a big difference.
Looking ahead, Texas is set to continue to outperform the national economy. Our unique combination of business-friendly climate, natural resource supply, and position in emerging industries will serve us well. My forecasts indicate that the differential in job creation and general economic growth is likely to persist.
Of course our future growth prospects hinge on taking care of basic needs such as infrastructure (particularly highways and water) and education of our young people to ensure we have the skilled workforce that will be needed by businesses of tomorrow. Like every other area, Texas will doubtless face business cycles; such things are inevitable. However, every indication at this point is that come what may, the Lone Star State will remain a center of economic growth for the foreseeable future.
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.