By: Dr. M. Ray Perryman
Published in syndication September 06, 2023
Although there are clearly challenges facing the global economy, the outlook for Texas remains largely favorable. Looking within the state, projected growth across all the entire spectrum of diverse metropolitan areas is also positive, though the pace of expansion varies notably. Let's take a quick look at some of our latest projections for the next five years.
In terms of the sheer numbers of net new jobs, about 79% of the state's total increase of over 1.3 million positions are expected to be created in Texas' seven major metropolitan areas, with almost half of them in the largest two alone: Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (MSA--rising 318,400) and Dallas-Plano-Irving Metropolitan Division (MD--up about 311,300). Austin-Round Rock-Georgetown (+130,000), Fort Worth-Arlington-Grapevine (+112,000), and San Antonio-New Braunfels (+108,000) are also expected to add substantial new workers.
When we focus on the rate of growth, however, the picture is a bit different. We are projecting that Midland will see the largest percentage increase in employment over the next five years, with a gain of about 10.4%. Expansion through 2027 in the greater Dallas, greater Austin, Tyler, and Brownsville-Harlingen areas is also likely to top 10%. McAllen-Edinburg-Mission, Fort Worth-Arlington-Grapevine, Odessa, Sherman-Denison, and greater Houston are likely to outpace the overall state rate of expansion (9.5%), with several other metro areas forecast to have total employment gains over the five-year horizon of more than 9%. The lowest total job increase we are projecting for any Texas population center is just below 8%.
Turning to output (real gross product) gains over the next five years, the areas projected to see fastest pace are generally in or adjacent to oil and gas production areas. Midland tops the list, with an expected total five-year increase of nearly 29%. We are forecasting that each of the Texas metropolitan areas will expand output by at least 15% between 2022 and 2027.
As drivers and centers of Texas economic activity, the growth of the largest MSAs generate benefits that ripple through smaller communities and rural areas across the state. At the same time, in many smaller metros, economies are healthy and there have been notable locations and expansions, setting the stage for continued positive general patterns for the foreseeable future.
Business cycles are inevitable, and there are certainly notable headwinds at this time. Even so, Texas' population centers are well positioned for notable employment and output increases over the next five years. I threw a lot of numbers at you, but hopefully they leave you with the notion that the highly diverse Texas economy - which spans mountains, valleys, deserts, forests, tropics, beaches, and all manner of business activity - is posed for ongoing growth in the coming years. Stay safe!