Economic Drivers of Texas

The opinions expressed are solely those of the presenters and do not reflect the opinions of the Federal Reserve Bank of Dallas or the Federal Reserve System.

TEKS (7th Grade Texas History)(12) Economics. The student understands the factors

that caused Texas to change from an agrarian to an urban society. The student is expected to:

(A) explain economic factors that led to the urbanization of Texas;(B) trace the development of major industries that contributed to the urbanization of Texas such as transportation, oil and gas, and manufacturing; and(C) explain the changes in the types of jobs and occupations that have resulted from the urbanization of Texas.

TEKS (7th Grade Texas History)(13) Economics. The student understands the interdependence

of the Texas economy with the United States and the world. The student is expected to:

(A) analyze the impact of national and international markets and events on the production of goods and services in Texas such as agriculture, oil and gas, and computer technology;(B) analyze the impact of economic concepts within the free enterprise system such as supply and demand, profit, government regulation, and world competition on the economy of Texas; and(C) analyze the impact of significant industries in Texas such as oil and gas, aerospace, medical, and computer technologies on local, national, and international markets.

Urbanization

• Urbanization is the story of a transformation of the Texas economy.

• Old story of cattle, cotton and oil has given way to a new narrative.

• New story is driven by jobs in the urban centers.

Where Texans Work• County Business Patterns (CBP) examines local

economic data by industry.– Number of firms– Number of paid employees– Payroll

• Uses North American Industry Classification System (NAICS)

• Excludes farming and railroads, along with household jobs

• http://www.census.gov/econ/cbp/index.html

Top 5 Industries by Number of FirmsIndustry Number of firms

Retail trade 76,787

Professional, scientific, and technical services 59,757

Health care and social assistance 59,193

Other services (except public administration) 48,097

Accommodation and food services 46,045

Top 5 Industries by EmployeesIndustry Paid

employees

Health care and social assistance 1,280,332

Retail trade 1,127,032

Accommodation and food services 908,665

Waste management and remediation services 830,284

Manufacturing 730,551

Top 6 Industries by PayrollIndustry

Annual payroll ($1,000)

Health care and social assistance 51,168,478

Professional, scientific, and technical services 40,436,455

Manufacturing 38,849,364

Finance and insurance 28,870,504

Management of companies and enterprises 28,811,285

Wholesale trade 28,125,856

Two Lenses

• The CBP data looks at how big various sectors are in Texas.

• Concentration is a different way to measure the impact.

Industry Clusters

• Geographically concentrated groups of companies related by – the technologies they use– the markets they serve– the goods and services they produce– the labor skills they require

Location Quotient

• Ratio of Local Employment Concentration to National Concentration within a sector.

• Numbers greater than 1 indicate a greater concentration than the nation as a whole.

• Numbers less than 1 indicate a lesser concentration than the nation as a whole.

Location Quotient

Top Five Industry ClustersIndustry Location Quotient

Oil and gas extraction 5.9

Support activities for mining 5.6

Pipeline transportation 4.33

Funds, trusts and other financial vehicles 2.78

Petroleum and coal products manufacturing 2.78

The Rest of the Top TenIndustry Location Quotient

Air transportation 1.67

Leather and allied product manufacturing 1.54

Support activities for transportation 1.51

Information and data processing services 1.42

Fishing, hunting and trapping 1.32

The Next FiveIndustry Location Quotient

Computer and electronic product manufacturing 1.24

Wholesale trade, durable goods 1.21

Broadcasting and telecommunications 1.2

Management of companies and enterprises 1.18

Nonmetallic mineral product manufacturing 1.15

Economic Drivers

Energy

ManufacturingServices

Austin

Computer and electronic product manufacturing 4.09

Publishing industries 2.01

Information and data processing services 1.78

Wholesale trade, durable goods 1.63

Lessors of nonfinancial intangible assets 1.57

Dallas-Fort Worth

Oil and gas extraction 3.05

Air transportation 2.78

Information and data processing services 2.45

Computer and electronic product manufacturing 2.11

Funds, trusts and other financial vehicles 1.82

Houston

Pipeline transportation 10.22

Oil and gas extraction 8.44

Funds, trusts and other financial vehicles 8.29

Petroleum and coal products manufacturing 5.08

Support activities for mining 5.07

San Antonio

Leather and allied product manufacturing 7.86

Information and data processing services 2.2

Management of companies and enterprises 1.79

Insurance carriers and related activities 1.65

Pipeline transportation 1.53

Texas Wide Open for Business

• Advanced Technology & Manufacturing• Aerospace, Aviation & Defense• Biotechnology & Life Sciences• Information & Computer Technology• Petroleum Refining & Chemical Products• Energyhttp://www.texaswideopenforbusiness.com/industries/index.php

Economic Drivers

Energy

Services

Manufacturing

???

Texas Exports (millions of dollars)

2009 Value 2010 Value 2011 Value 2012 Value

162,995

206,992

250,662264,709

Texas’ Top Markets

• Mexico• Canada• China• Brazil• Netherlands• South Korea

• Singapore• Colombia• Japan• Belgium

Economic Drivers

Energy

Services

Manufacturing

Exports

Questions?

For more information• For data about the regional and national economy, see:

www.dallasfed.org • For information about key Texas industries, see:

http://www.texaswideopenforbusiness.com/industries/index.php • For industry profiles, see:

http://governor.state.tx.us/ecodev/business_research/industry_profiles/%20

• To learn about industry classifications, see:http://www.bls.gov/iag/home.htm

• For export data, see:http://www.census.gov/foreign-trade/statistics/state/data/tx.html