For the past 5 years, Texas has taken home the Governor’s Cup for Total Number of Projects – an astounding accomplishment and a testament to the state’s strength in providing an inviting business climate for corporations. This award has been accepted on behalf of the state by Texas Governor Greg Abbot for the past 3 years. In his acceptance, the governor cites Texas’s commitment to low/no taxes, supplying a skilled workforce, and to diversifying the state economy as the primary factors of Texas’s success. Below you can see the top ten rankings of the past three years:
Governor’s Cup Top States by Number of Projects
2016 Top States
2015 Top States
2014 Top States
The top 4 states have remained consistent for the past 3 years indicating these development trends are part of a longer-term pattern of encouraging economic growth in each of these states. Taking a closer look at some of the notable projects in Texas over the past few years, it becomes apparent why Texas consistently comes in at number 1 on the rankings:
1.Exxon Mobil Corp.
1. Rio Grande LNG
2. Sempra Energy
3. Phillips 66
4. Lyondellbasell Industries N.V.
4. Gerson Lehrman Group
5. Ineos Americas
5. Total Petrochemicals
The largest projects in Texas are still in the oil and gas industry, but in 2016 a higher number of non-oil and gas industry related investment projects took place. Meglobal and Lyondellbasell Industries, two companies in the chemical industry took ranks 2 and 4 respectively for top Texas projects.
In terms of total number of projects in Texas, most of these projects are taking place in Dallas and Houston, with these two city hubs housing 69% of the total number of Texas-based projects. The remaining metropolitan and suburban areas (including Austin and San Antonio) house the majority of the remaining 31% of projects taking place in 2016.
Beyond projects, Texas also ranks #2 in Top US States for Corporate Headquarters with 186 projects underway with 89 of those projects in the DFW area. Texas falls second to Illinois (200 projects) where Chicago houses 199 of the state’s Corporate HQ growth. Given that the remaining 52% of Corporate Headquarter projects fall outside of the DFW area, this indicates that Texas has several growth hubs in addition to DFW, suggesting economic development is not only concentrated in one or two metro areas.
Further, Texas ranks #2 in most Fortune 500 corporate headquarters with 54 Fortune 500s, ranking second to New York with 55 Fortune 500s. Not surprising, the top three states for the most projects for the Governor’s cup are also in the top 5 states for the number of Fortune 500 companies.
Further, the top 3 fastest growing cities in the US are in Texas: 1. Houston, 2. Austin, 3. Dallas; and of the top 10 fastest growing cities, half are in Texas. Much of this growth is coming from residents and businesses leaving California in favor of the Lone Star State. This Californian business exodus is driven by Texas’ more favorable business climate and cheaper cost of living and doing business.
Overall, the economic state of the state is strong, and Texas is projected to continue this economic growth trend going forward. As this growth trend continues, Texas is likely to continue its diversification in industries outside of the oil and gas industry. Although, as oil prices edge back up, the industry will experience a rebound to match. Ultimately, time will tell if the state can continue to expand its economic growth, but the current economic outlook is as sunny as our clear Texas skies.