Texas Dominates Business Growth: 2025 Economic Outlook and Key Drivers of Success
For a record 13th year in a row, Texas has earned the Governor’s Cup award for leading the U.S. in job-creating relocation and expansion projects. Texas totaled 1,368 qualified capital investment projects in 2024, more than doubling the number of the second-place state, Illinois.
Recognized for its business-friendly policies, skilled workforce, and competitive infrastructure, the Lone Star State is heading into 2025 with a steady and optimistic economic outlook.
Despite national uncertainties, Texas’ economy remains one of the most resilient and high-performing in the U.S., with a GDP now exceeding $2.6 trillion, making it the eighth-largest economy in the world if it were a country.
2025 Economic Outlook: Growth Ahead, Challenges Managed
Economists expect Texas to maintain a strong pace of growth in 2025, closely mirroring its 3.9% expansion in 2024, which outperformed the national average. While job growth may moderate slightly, driven by slower in-migration and tighter labor availability, Texas remains on a solid economic foundation.
Energy prices, inflation trends, and trade policies remain variables to watch — especially tariffs on Mexico, Texas’ top trading partner. Yet, experts from the Dallas Federal Reserve note that deregulation, potential tax cuts, and a flexible, market-driven economy position Texas to navigate these headwinds effectively.
Built for Growth: Why Businesses Thrive in Texas
Texas continues to offer a combination of advantages that support large and small businesses, startups, and established enterprises:
- No personal or corporate income tax
- A predictable regulatory environment
- Significant investments in workforce development and infrastructure
- Strategic location and access to global markets
The state added 125,000 new business entities in 2024, bringing the total to nearly 2.93 million — almost double the number from a decade ago.
The numbers speak for themselves, which is why the Texas business climate has been ranked #1 in the U.S. by Site Selection magazine for the second consecutive year.
Texas’ Economic Pillars: Energy, Innovation, and Industry
Energy
Texas remains the top producer of crude oil, natural gas, and wind power, and generates more electricity than any other state — more than double the second-place state. It also ranks second in LNG exports and continues to lead in utility-scale solar development.
The rise of cryptocurrency mining in Texas reflects the state’s ability to turn energy challenges into innovation. Miners are helping reduce flared natural gas while contributing to grid stability by returning power to the grid during high-demand events.
Technology and Manufacturing
With consistent leadership in semiconductor and tech exports (No. 1 and No. 2 in the nation, respectively), Texas continues to attract industry giants like Tesla, Oracle, Apple, and Hewlett Packard. The state also boasts the second-largest semiconductor workforce in the U.S., a key sector for future resilience.
Aerospace and Life Sciences
Texas ranks first for aerospace manufacturing attractiveness, and is home to the world’s largest medical complex, as well as the newly launched Texas Space Commission, signaling future-forward investments in space innovation.
The Texas Advantage: People, Talent, and Infrastructure
With a workforce of 15.5 million+, Texas is both young and growing — attracting more Gen Z and Millennial talent than any other state. Investment in education and technical training supports key sectors, including manufacturing, IT, logistics, and life sciences.
Texas is also the nation’s leader in infrastructure. It boasts:
- 23 seaports and 12 deep-water ports
- 380 airports and 10,400 miles of rail
- The largest roadway and freight network in the U.S.
- 35 foreign trade zones and $240M+ in port investments
These assets help maintain Texas’ 23-year streak as the top exporting state.
Charting a Resilient Future
In 2025, Texas is not only riding the momentum of past growth — it’s laying the foundation for the future. Initiatives like the Texas CHIPS Office, the Texas Energy Fund, and expanded workforce development programs are aimed at sustaining long-term prosperity while supporting innovation.
With a pragmatic regulatory approach, diverse economy, and continued focus on opportunity creation, Texas remains one of the most compelling places in the world for business expansion and investment.
Want to explore what Texas can offer your business? Contact us to discover more about why so many companies are choosing to go big in Texas.
