Texas Market Pulse

Spotlight: Texas voted ‘Best State to do Business’ for the 19th consecutive year

• Economic Snapshot May ‘23

• Economic Indicators May ‘23

• Corporate Relocations

Best State for Business

With an unmatched track record spanning nearly two decades, Texas has once again secured its unrivaled position as the ultimate hub for business success, winning the prestigious title of “Best State for Business” for a remarkable 19th year in a row, according to Chief Executive Magazine. Chief Executive’s rankings are compiled from the opinions of CEOs and business owners across the U.S. The resounding endorsement of nearly 700 CEOs, representing all corners of the nation, who participated in the comprehensive survey conducted in January 2023, further solidifies Texas’ unmatched record. Texas has consistently set the gold standard in the nation every year since Chief Executive began the ranking in 2001, according to texas.gov. With its undeniable allure, the Lone Star state has successfully enticed a multitude of companies away from renowned business powerhouses like California and New York. Boasting a combination of exceptional talent and a highly favorable business climate, Texas has become a magnet for enterprises seeking unparalleled opportunities.

Simultaneously, Texas is fostering rapid economic expansion by cultivating a vibrant startup ecosystem. In a remarkable feat, Texas-based startups garnered an impressive sum exceeding $10 billion in 2021, more than doubling the previous year’s figures, according to data from PitchBook and the National Venture Capital Association. Additionally, Texas proudly claims the top spot for residential growth, with an astounding 50% of the nation’s fastest-growing cities nestled within its borders. This dual triumph cements Texas’s status as an economic powerhouse, attracting external companies while nurturing its own thriving business ecosystem.

As the 9th largest economy among the nations of the world, Texas offers a combination of unique competitive business advantages that no other state can claim: a business-friendly climate—with no corporate or personal income tax—along with a highly skilled and diverse workforce, easy access to global markets, robust infrastructure and a reasonable regulatory environment. Texas will long remain the best state for businesses large and small.

Economic Snapshot May ‘23

Texas continues to lead the nation in an economic resurgence and remains one of the strongest and most diverse economies in the U.S., according to Texas Economic Development.

• Texas unemployment rate is 4%.

Texas Workforce Commission, March

• In March, there were 35 new project locations announced in areas across Texas by various news sources. The projects are expected to create $18.12 billion in capital investment

EDT Research

• State sales tax revenue for May totaled $4.1 B, up 7.4% compared to the same month last year.

Texas Comptroller of Public Accounts

• Texas added 28,600 nonagricultural jobs in March, setting new records for total jobs, Texans working and labor force.

Texas Workforce Commission

• Texas job recovery rate is 159%.

EDT Analysis, March

• The Texas workforce is more than 14.89 M.

U.S. Bureau of Labor Statistics, March

• In February, Texas exports totaled nearly $34.2 B. USA Trade

• Texas had the fastest GDP growth in the U.S. for the fourth quarter of 2022 with a 7% growth rate— growing faster than the nation as a whole.

U. S. Bureau of Economic Analysis

Economic Indicators dashboard

Source: U.S. Bureau of Labor Statistics

Sources: US Bureau of Labor Statistics and Comptroller of Public Accounts, based on data provided by Bureau of Labor Statistics; The Conference Board

Source: Texas Comptroller of Public Accounts

• Unemployment rates are just above US national average - tech layoffs are a major contributing factor as tech industry grows in Texas

• Dispite layoffs, Texas added 575,100 jobs (year over year) as of March 2023

• Consumer spending continues on an upward trend month over month despite a rising consumer price index (CPI) and falling consumer confidence index (CCI)

• CPI TX: 5.0% | CPI US: 5.0% (Change from previous year)

• CCI TX: -12.3%| CCI US: -6.7% (Change from previous year)

Economic Outlook

The Texas economy, after a period of robust growth, has recently displayed indications of a slowdown as it transitions into the month of May. Despite this overall deceleration, pockets of strength persist within the state.

As we progress into 2023, concerns of a potential recession loom, with the Federal Reserve diligently working to rein in national inflation. Amidst these concerns, it is important to recognize resilient sectors within the Texas economy, which continue to demonstrate strength and present opportunities for sustained economic vitality.

Key Deals

The service sector has seen continued growth in recent months, job gains remain robust, wage pressures haven’t yet abated and the housing market has begun to stabilize. The Texas 2023 job forecast was revised down to 2.4 percent in April from 2.8 percent in March, with an expected average annualized growth rate of 1.9 percent for the remainder of the year.

After two years of fast economic growth, Texas is poised to see a “soft landing” in 2023, according to The Federal Reserve Bank of Dallas and Texas Tribune.

Texas remains the premier destination for companies to relocate and expand in the U.S. Our robust economic recovery and positive outlook have fueled sustained interest in potential opportunities from both large enterprises and small businesses. Here are a few companies who recently announced their move or expansion in the state of Texas.

Fortune 500’s

According to FORTUNE, here are the 53 Fortune 500 companies headquartered in Texas, in order of revenue:

• Exxon Mobil (The Woodlands)

• McKesson (Irving)

• AT&T (Dallas)

• Phillips 66 (Houston)

• Valero Energy (San Antonio)

• Dell Technologies (Round Rock)

• Energy Transfer (Dallas)

• Tesla (Austin)

• Sysco (Houston)

• Caterpillar (coming to Irving)

• ConocoPhillips (Houston)

• Plains GP Holdings (Houston)

• Enterprise Products Partners (Houston)

• Oracle (Austin)

• USAA (San Antonio)

• American Airlines (Fort Worth)

• Hewlett Packard Enterprise (Houston)

• D.R. Horton (Arlington)

• CBRE Group (Dallas)

• NRG Energy (Houston)

• Occidental Petroleum (Houston)

• Baker Hughes (Houston)

• Builders FirstSource (Dallas)

• Tenet Healthcare (Dallas)

• Kimberly-Clark (Irving)

• Charles Schwab (Westlake)

• EOG Resources (Houston)

• HF Sinclair (Dallas)