What is the biggest attraction to Texas?
The biggest lure for migrants to Texas, as anywhere else, is the availability of jobs. On that score, the latest trend has been encouraging. Over the first nine months of 2010, non-farm jobs have increased at a 1.9 percent annual rate. That is more than three times as fast as the increase in jobs nationally.
What accounts for the accelerated hiring in Texas?
Several key sectors contributed disproportionately to the accelerated hiring: mining, manufacturing, and professional and business services. The first is no surprise: given that it reflects the rebound in drilling activity. Since the end of last year, the Baker-Hughes rig count has increased by 65 percent as producers have responded to the increase in economic activity and the rebound in energy prices.
The strength in manufacturing also is unsurprising. Texas has a somewhat larger manufacturing sector than most states, and it is factory output that has been by far the strongest source of cyclical recovery.
The strength in professional and business services is a reflection of Texas’s favorable business climate. Over the past decade, the state has developed an increasingly diverse and dynamic set of industries. Texas has been a magnet for first-rate companies and individuals looking for an attractive place to relocate. Increasingly, the United States is a knowledge-based economy, and that is exactly where Texas has performed so strongly as is reflected in the strong growth in professional and business services.
What do you see for Texas, looking forward?
Looking forward, I believe that Texas will continue to outperform the national economy at least through the end of 2011. It’s a familiar story in many regards. The favorable growth trends in the state will continue to attract businesses and households looking to relocate. Texas’s relatively mild housing woes will help sustain its growth advantage, too.
Continued global growth promises to bolster the energy sector. Finally, the state will continue to benefit from its above-average exposure to manufacturing, a sector where demands are likely to grow faster than the overall economy.
Dana Johnson is senior vice president and chief economist at Comerica Bank, a position he has held since January 2005. Johnson leads the banking company’s Economics Department, providing commentary and research of interest to Comerica and its customers, as well as media.