texas border operations
I’ve been analyzing the Texas economy for more than 40 years. This includes looking ahead and predicting growth patterns (even though I was young when I started). I recently took a deeper dive into the state’s long-term outlook, including which industries are likely to lead the way. Let’s take a look.
In the distant past, Texas’ economy was based almost entirely on cattle, cotton, and oil. Our strong resource base is a major source of employment and business activity, and these industries are still important today. Agriculture should continue to experience modest growth in employment and production over the next few decades. As an important source of food and fiber production, isolated starlands help meet the needs of a growing world population.
Energy will continue to be the basis of economic expansion. Renewable and innovative resources such as hydrogen are important, but oil and natural gas remain essential. These fuels must be produced responsibly, and projections from virtually every major source (including my own company) indicate that we will need these fuels. Natural gas reduces emissions by replacing coal, and traditional fuels are essential to addressing extreme poverty around the world. Even as we grapple with legitimate climate change issues, these industries are at the forefront of new technologies to capture carbon and reduce emissions. At the same time, it creates jobs, revenue, and tax revenue for Texas. In fact, the state is a leader in almost all aspects of the energy complex.
Manufacturing will be a source of significant growth. The mix will evolve, but the trend will be upward. Rapidly emerging sectors such as biosciences, commercial space activities, cryptocurrency mining, data centers, and AI are accelerating the trajectory of business activity in Texas.
The largest industry group in terms of both output and employment growth is likely to be professional and business services. Workers in this sector drive the economy and support every aspect of the industrial park.
Population growth (and aging) contributes to improvements in health and social services, education, and the public sector. Logistics will expand to keep things moving. Real estate such as buying, selling, leasing, and management is also a factor in the increase.
All major segments are expected to increase, but there will be inevitable changes in certain activities. Over the next few decades, technological and demographic changes will drive the creation of businesses and entire industries that we can’t even imagine yet. Fortunately, the dynamic Texas economy is well-positioned to evolve as needed and maintain the leadership that has endured through decades of change. There is no doubt that we have some challenges to face (education, power, water, transportation, etc.), but the foundations are definitely in place. Stay safe!
__________________________________
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of more than 3,000 customers over the past 40 years.
