The Texas economy is among the strongest in the nation, and the state continues to chalk up wins in terms of major corporate locations. Recent growth and the ongoing stream of new and expanding businesses is signaling an upward trend over the long term. In fact, in the latest release of output data by the Bureau of Economic Analysis, Texas ranked first in percentage increase, a remarkable achievement for such a large state (but one that occurs frequently).
The US economy is well positioned for long-term growth, and our latest forecast indicates expansion at a moderate pace. Jobs continue to be added at a notable rate, and other signals are generally positive. For example, the housing market has finally worked through the major problems of the Great Recession, a positive signal for expansion. At the same time, trade issues remain unresolved and labor shortages are impediments to optimal performance.
Texas' largest metropolitan areas are set for relatively healthy growth over a long-term horizon. Business cycles will happen, but when we look out through 2040, the state's major population centers are likely to continue to compare well with most parts of the country in terms of economic expansion. The Austin and Dallas areas should lead the way, with Houston, San Antonio, and Fort Worth also doing quite well. For reference, our most recent long-term forecast for the state economy indicates that Texas output (real gross product) will likely expand at a 3.35% annual pace through 2040, while total wage and salary employment grows at a 1.64% yearly pace.
The US economy is on fairly solid ground, and our latest forecast calls for moderate growth over the long-term horizon. There are several areas of concern and business cycles are inevitable, but on balance, I expect improvement in the years to come.