Economy of Texas
From Wikipedia, the free encyclopedia
The economy of Texas is a dominant force in the economy of the United States. One of the largest growing economies in the nation, Texas is, as of 2006, home to six of the top 50 companies on the Fortune 500 list and 56 overall, more than any other state. [2] Texas has an economy that is the second largest in the nation and the 15th largest in the world based on GDP (PPP) figures. As the largest exporter of goods in the United States, Texas currently grosses more than 100 billion dollars a year in trade with other nations.
In 2006, Texas had a gross state product of $1.09 trillion,[1] the second highest in the U.S.[2] Gross state product per capita as of 2005 was $42,975.
Texas is second only to California, with almost 11 million civilian workers giving it the second largest workforce of any state in the United States. The lack of personal income tax as well as the largely undervalued real estate throughout Texas has led to large growth in population. Since the 2003 legislature the Governor's office has made economic development a top priority.
Much economic activity in Texas is regional– for example, the timber industry is important in East Texas's economy but a non-factor elsewhere, while Houston, the state's largest urban economic enclave stands at the center of the petrochemical, biomedical research trades, shipping, and aerospace (particularly NASA). Meanwhile, Dallas houses the state's predominant defense manufacturing interests and the expansive information technology labor market. West Texas and the panhandle is dominated by ranching .
Texas's growth can be attributed to the availability of jobs, the low cost of housing, the lack of a personal state income tax, high quality of education, low taxation and limited regulation of business, a central geographic location, a limited government, favorable weather, and plentiful supplies of oil and natural gas. There are currently 33 billionaires residing in Texas today. Dallas has 11 billionaires, the most of any city in Texas.
Texas has the highest number of Fortune 500 company headquarters in the United States, fifty-eight.[3] This has been attributed to both the growth in population in Texas and the rise of oil prices in 2005. Houston has the second highest number of Fortune 500 companies in the US, second to New York.
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[edit] History
Texas remained largely rural until World War II, with cattle ranching, oil, and agriculture as its main industries. Cattle ranching was never Texas's chief industry – before the oil boom back to the period of the first Anglo settlers, the chief industry was cotton farming. After World War II, Texas became increasingly industrialized.Its economy today relies largely on information technology, oil and natural gas, fuel processing, electric power, agriculture, and manufacturing.
[edit] Exports
In 2006, for the fifth year in a row, Texas led the nation in export revenues. Texas exports for 2006 totaled $150.8 billion, which is $22.1 billion more than 2005 and represents a 17.2 percent increase. In 2002, the Port of Houston was 6th among the top sea ports in the world in terms of total cargo volume;[4] Air Cargo World rated Dallas-Fort Worth International Airport as "the best air cargo airport in the world".[5] The ship channel at the Port of Houston—the largest in the U.S. in international commerce and the sixth-largest port in the world.[6]
[edit] Industries
[edit] Agricuture
Texas is a productive agricultural state with the most farms both in number and acreage in the United States.[7] Texas leads the nation in number of cattle, which usually exceed 16 million head. The sprawling 320,000 deeded acre (1,200 km²) La Escalera Ranch, located 20 miles (32 km) south of Fort Stockton, Texas, is one of the largest cattle ranches in the Southwestern United States.
The state also leads nationally in production of sheep and goat products. Texas is king of cotton leading the nation in cotton production, its leading crop and second-most-valuable farm product.[7] Texas is a leader in cereal crop production. The state is a large produce growing state especially with watermelons, grapefruits and cantaloupes.[7]
[edit] Aeronautics and Defense
The crown jewel of Texas's aeronautics industry is the Lyndon B. Johnson Space Center, the center of the National Aeronautics and Space Administration.
The Dallas-Fort Worth International Airport, located nearly equidistant from downtown Dallas and downtown Fort Worth, is the largest airport in the state, the second largest in the United States, and fourth largest in the world.[8] In terms of traffic, DFW is the busiest in the state, third busiest in the United States, and sixth busiest in the world.[citation needed] The airport serves 135 domestic destinations and 40 international. DFW is the largest and main hub for American Airlines, the world's largest in terms of total passengers-miles transported[9] and passenger fleet size.[10]
Texas's second-largest air facility is Houston's George Bush Intercontinental Airport (IAH). Houston is the headquarters of Continental Airlines, and is the airline's largest hub. IAH offers service to the most Mexican destinations of any U.S. airport. IAH currently ranks second among U.S. airports with scheduled non-stop domestic and international service.
Southwest Airlines, headquartered in Dallas, Texas, began its operations at Dallas Love Field.[11] It is the largest airline in the United States by number of passengers carried domestically per year and the largest airline in the world by number of passengers carried.[12]
Lockheed Martin's Aeronautics division is located in Fort Worth, Texas. The F-16 Fighting Falcon, the largest Western fighter program is produced in Fort Worth, Texas. [13] The plane's successor, the F-35 Lightning II will also be produced in Fort Worth.
Bell Helicopter Textron is headquartered in Fort Worth as well, and manufactures several helicopters for the military, including the V-22, on which final assembly is performed in Amarillo.
Other defense contractors with a large presence in Texas include Lockheed Martin Missiles and Fire Control, Raytheon, DynCorp, AECOM, and KBR.
[edit] Computer Technology
Texans pride their state's history, but they also seek new social and technological developments. The Austin area is often nicknamed "Silicon Hills". Dell's headquarters is located in the city's suburb, Round Rock. Dallas is the birthplace of the integrated circuit. The North Dallas area is called the "Silicon Prairie" for the area's high concentration of Information Technology companies such as Texas Instruments and EDS. In addition, Houston based Compaq, was once the world's largest computer companies. After Compaq's merger with Hewlett-Packard, the new owner currently employs more employees in Houston, than anywhere else in the world.
[edit] Energy
Texans consume the most energy in the nation both in per capita and as a whole.[14] Since 2002, Texas deregulated its electric service with mixed results.[citation needed]
The known petroleum deposits of Texas are about 8 billion barrels, which makes up approximately one-third of the known U. S. supply. Texas has 4.6 billion barrels of proven crude oil reserves.[14] As wells are depleted in the eastern portions of the state, drilling in state has moved westward.[7] The oil companies Exxon-Mobil, Valero, and Marathon Oil are located in Texas.
Houston is a global leader in the energy industry. Since 2003, Texas state officials have created various initiatives like the Texas Enterprise Fund and the Texas Emerging Technology Fund to develop the economy of Texas. Texas is a leader in alternative energy sources, producing the most wind power of any state,[15] as well as small solar powered efforts and the experimental installation of wave-powered generators. Texas also is home to many of the world's largest oilfield services firms including Haliburton, Schlumberger and Dresser. The state has a number of pipeline operators, such as El Paso and Dynegy, along with diversified energy firms such as TXU and Reliant Energy.
[edit] Tourism
Texas has a large tourism industry. The state tourism slogan is "Texas: It's like a whole other country", a nod to Texas's diversity and history. Tourists might enjoy San Antonio and El Paso's hispanic culture, or Fort Worth western attractions. Galveston, Corpus Christi, and Padre Island are some of the popular Texas resort areas located on the Gulf of Mexico. Houston is Texas' leading convention city. While, Dallas is also one of the nation's leading convention cities. Houston was the first city in Texas awarded with a CityPass. [16]
[edit] Entertainment
Texas is a top filmmaking state. Austin is now one of the leading filmmaking locations in the country. The popular soap opera's, Dallas, exteriors were filmed on Southfork Ranch, a location near Plano, Texas. During 1995-2004, more than $2.75 billion has been spent in Texas for film and television production. The Texas Film Commission was founded for free services to filmmakers, from location research to traveling.[17] Also many Hollywood studios are relocating parts of their production divisions to the Austin area.[17]
The media conglomerate Clear Channel Communications is based in San Antonio, Texas. Pi Studios and Timegate Studios are based in the Houston area. Blockbuster Video and Cinemark Theatres are also based in the Dallas Fort Worth area.
[edit] Legislation & Grant Initiatives
In June 2003, as an effort to attract new businesses and facilitate growth, the Texas government passed legislation funding the Texas Enterprise Fund and the Texas Emerging Technology Fund. These funds have given more than $316 million to companies through 2006, making Texas one of the fastest growing economies in the nation. Further, initiatives such as Tort Reform (2003) and tax incentives are being utilized in order to help small and big business alike.
[edit] Texas as an independent nation
The economy of Texas is often cited for how it would compare to other countries if Texas were an independent nation. The statistic quoted varies widely (usually placing Texas between 10th and 15th) depending on the source.
The two main issues are:
- determining Texas's gross state product
- determining the gross domestic product (GDP) for various countries
[edit] Texas's gross state product
According to the Bureau of Economic Analysis, Texas's Gross State Product (GSP) is $989 billion (2005 data, revised July 2006). The GSP increased at an annual rate of 5.1% in 2005. Texas is responsible for 7.9% of the United States' gross domestic product.
