06/18/2004: "The Long-Term Future of Texas Looks Promising"
The recent, prolonged sluggishness of the worldwide economy greatly reduced demand for many Texas goods and services, and the various terrorist-related activities and other concerns significantly weakened the state economy. Various industries, particularly those involving transportation, tourism, and manufacturing saw significant drops. However, more recently, the state economy has taken a definite turn for the better.
During the next few years, the Texas economy is projected to experience moderate expansion, with the momentum for considerable improvement increasing. These advancements should enable the economy of the Lone Star State to outpace the growth percentage of the US economy over the long term (2003-2030).
The population of the state is projected to achieve a compound annual growth rate (CAGR) of 1.66% over the 28-year period and reach 34.43 million in 2030. Real gross product is forecast to climb at a yearly hike of 3.63% to top $1.88 trillion at the end of the forecast horizon. The number of wage and salary jobs should see a CAGR of 1.62% with 15.41 million workers in 2030, a 5.42 million gain from the 2003 employment total.
Texas’ largest industrial sector in 2030 (as measured by employment) should be services, with 33.61% of the jobs. This percentage represents about 5.18 million workers. The trade and government sectors are expected to follow with 22.88% and 16.32% of all wage and salary jobs, respectively.
Recent indications of rapid recovery in key industries bode well for the state’s future. The transportation and tourism sectors are showing signs of new life, and demand for products and services are growing. Employment in Texas is experiencing solid growth, and manufacturing is continuing to gain strength.
The outlook for high-tech manufacturing is positive, as worldwide requirements rise. The retail sales, construction, and real estate sectors are cautiously optimistic as market conditions improve and solidify.
Although some sectors are experiencing difficulties because of high energy prices, the overall strength of the state’s economy has not been dramatically affected. Business spending continues to be fairly constant, and interest in investment opportunities is being sustained.
Much of the economic expansion expected for Texas is attributable to a favorable mix of emerging industries and fruitful efforts to attract quality corporate locations. In addition, population growth, enhanced educational opportunities, and skilled worker training, along with relatively low business and housing costs will likely lead to future vitality.
In addition, technological advancements and greater efficiency in the use of resources in various business arenas are projected to result in significant productivity gains. Internet commerce is anticipated to see major growth and thereby open doors for new entrepreneurial and investment opportunities.
The ongoing diversification of business operations and the strengthening of international trade will also substantially improve the state’s growth and economic prosperity in the future.
As the national and state economies gain momentum over the next few years, significant increases in business activity are forecast for high-tech manufacturing, computer-related activities, healthcare industries, and tourism. Over the long term, the Texas economy is prepared to experience positive performance.