Often when people think of Texas, images of wide-open spaces, large farms and ranches, oil rigs, and cowboys come to mind. For those a bit more knowledgeable about the state, images conjured up might include space programs, international trade activities, and high-tech manufacturing, along with heavy rush hour traffic in bustling metropolitan centers.
So which view or views are correct? Not to equivocate, but the answer is both!
When it comes to what makes Texas tick, however, the answer can be found in the metropolitan areas. That’s not to say that endeavors in the wide open spaces don’t count, for they truly do (and their ongoing viability and prosperity are crucial), but the engines that drive our state’s economy are generally headquartered in urban centers.
Metropolitan statistical areas (MSAs) are centers of population and commerce with specified parameters. Texas has 25 metros that fall into this category. Each has a substantial population hub of at least 50,000 people with core census tract or block groups with densities of 1,000 persons or more per square mile.
The Census, which is taken every 10 years, determines those areas eligible for such groupings. Prior to 2004, the Lone Star State had 27 metropolitan statistical areas encompassing 58 counties. In the recent redefining of the MSAs, the Census Bureau dropped 3 counties and added 22. As a result, Texas now has 25 MSAs. Though the metro count has fallen, the outreach has expanded to 77 of the state’s 254 counties.
The five major metros include the largest population centers in the state. These MSAs together have about 15.10 million residents, which represents 65.87% of the total population of Texas. The smaller metros have a combined population of some 4.76 million or approximately 20.78% of the state’s total residents. The remaining 13.35% live in the other 177 counties.
The strategic value of the metro areas is easily recognizable when you consider that the major portion of the state’s real gross product (RGP or output) is generated by the 25 MSAs.
Over the next five years, Texas is forecast to achieve output expansion of about $199.25 billion. Of that amount, the five largest MSAs will likely account for $162.38 billion or 84.49%, and the 20 smaller metros are expected to generate $25.14 billion, or 12.55% of the state total output.
The compound annual growth rate (CAGR) for Texas RGP over the 2005-2010 timeframe is forecast to be 4.34%. Three of the major metros are predicted to achieve per annum increases that exceed the state’s aggregate yearly growth—Austin-Round Rock; Dallas-Fort Worth-Arlington, and Houston-Baytown-Sugar Land. The other two major MSAs, El Paso and San Antonio, are expected to experience a CAGR of 4.28% over the five-year period. During these years, the smaller metros’ per annum expansion rates will likely range from 3.64% to 4.35%, with the Tyler MSA achieving the highest CAGR.
With regard to where the jobs are in the state, it’s clear when looking at the data that the urban centers offer the greatest opportunities. The number of people employed in the services industries far exceeds those working in the other major industrial sectors. Nearly 422,000 new jobs are forecast to be created in the services sector over the next five years. That’s almost 45% of the state’s overall gain in the number of jobs for this period.
The employment CAGRs for the major MSAs from 2005 to 2010 are projected to range from 1.81% to 2.02%, all of which are higher than the state’s 1.80% annual rate. Four of the smaller metros are anticipated to achieve higher yearly wage and salary worker percentage growth rates than the state as a whole. These MSAs—Laredo; McAllen-Edinburg-Pharr; Brownsville-Harlingen; and Tyler—will likely have CAGRs ranging from 1.82% to 1.87%. The remaining 16 small metros per annum gains should vary from 1.18% to 1.78%.
Wide-open spaces, large farms and ranches, oil rigs, and cowboys still come to the minds of many people when they think of Texas—and well they should! It is nonetheless clear that in today’s global economy, the metropolitan areas are likely to drive the state’s future growth and development.