Texas' Economic Strength and Growth

Texas’ economy isn’t just big—it’s built for resilience, opportunity, and long-term growth.

With a $2.7 trillion economy, Texas ranks as the 8th largest economy in the world, outpacing global players like Russia, Canada, and Italy. But this is more than a measure of size—it’s a sign of dynamic strength across sectors, regions, and workforce demographics.

Texas’ sustained growth is rooted in a combination of factors: a pro-growth regulatory climate, a skilled and expanding workforce of 15.7 million strong, a diversified industrial base, and a strategic location that makes it a gateway for global trade. These conditions have helped Texas rank #1 in exports in the U.S. for 23 consecutive years and attract more corporate relocations than any other state. In fact, 314 corporate headquarters have moved to Texas since 2015, including Tesla, Oracle, and Hewlett Packard Enterprise.

The state’s business ecosystem is equally strong at the ground level. With 3.3 million small businesses—including a record 500,000 new business applications filed in 2024—Texas continues to be a magnet for entrepreneurs and high-growth startups.

Texas’ national recognition for economic performance is unmatched:

• Governor’s Cup – awarded to Texas 13 years in a row for most corporate expansion projects
• Prosperity Cup – Top state for attracting new business investments
• Best State for Business – Ranked #1 by CEOs for 21 consecutive years

With a young and growing population, a diversified economy, and unmatched infrastructure advantages, it’s easy to see why Texas is the best for business.

Texas Economy Growth

In 2024, real GDP grew by 4.8%, outpacing the national average and reaffirming Texas’ resilience amid a challenging economic landscape.

Texas has also led the nation in job creation for three consecutive years, adding 2.5 million jobs under Governor Greg Abbott’s administration.

• Workforce strength: Texas’ civilian labor force is more than 15.78 million, making it one of the youngest, most diverse, and fastest-growing workforces in the country.
• Workforce development: Over 4 million Texans engage in education and upskilling programs annually.
• Education pipeline: Texas is home to 16 Tier One research universities, and nearly 370,000 higher education graduates entered the economy in 2023.

Key Sectors Powering Texas’ Economic Growth

• Advanced manufacturing: Texas’s advanced manufacturing sector has experienced significant GDP growth, emphasizing high-value, high-tech production. The state is prioritizing investments in semiconductor manufacturing, workforce development, and supply chain resilience, with the sector contributing approximately $64 billion to Texas’s GDP.
• Aerospace and aviation: Employing over 150,000 workers across more than 2,000 establishments, Texas’s aerospace and aviation industry remains robust. Recent strategic planning by the Texas Aerospace Commission aims to further develop the sector.
• Biotech and life sciences: Anchored by cities like Houston, Austin, and Dallas–Fort Worth, Texas has developed a robust life sciences and biotechnology sector that includes over 7,000 life science firms, advanced research hospitals, biotech incubators, and biomanufacturing hubs.
• Energy and renewables: Texas leads the nation in renewable energy production, with renewables accounting for 30% of the state’s energy mix year-round and peaking at 80% on certain days.
• Information and computer technology: The tech industry contributes approximately $198 billion to the Texas GDP, accounting for about 7.6% of the state’s total economic output. The state’s favorable business climate has attracted major tech companies such as Meta, Tesla, and Apple, which is expanding its presence in the Lone Star State with a new factory in Houston.

Financial Markets Are Growing in Texas, Too

Texas is reshaping the national financial landscape, with new stock exchanges signaling its growing influence in capital markets. In 2025, the New York Stock Exchange announced plans for NYSE Texas, a new, fully electronic exchange headquartered in Dallas. This move reinforces Texas’ appeal as a financial hub and is expected to attract institutional investment and high-wage jobs.

Additionally, Dallas is slated to become home to the Texas Stock Exchange (TXSE), backed by major investors like BlackRock, Citadel Securities, and Charles Schwab. With plans to launch in 2026, TXSE will offer companies an alternative venue for listing and trading, further boosting Texas’ national role in capital markets.

Nasdaq has also announced a new regional headquarters in Dallas, expanding its presence in the state to serve over 2,000 financial institutions and corporations in the region. This continued investment from leading financial players highlights Texas’ emergence as a central hub for market activity and corporate expansion.

Texas Economy Ranking

Texas holds the #1 rank for business climate and has been named Best State for Business for 21 years straight by Chief Executive magazine.

Texas also ranks:

• #1 in exports (22% of U.S. total)
• #1 for foreign direct investment over the last 20 years
• #1 for aerospace investment
• #1 for semiconductor and tech exports
• #1 for job growth in financial services
• 2025 Prosperity Cup winner for new business investments
• 13-year winner of the Governor’s Cup for business expansions
• 12-time Gold Shovel Award recipient for job-creating investments

Texas is also ranked the #2 overall state economy by U.S. News & World Report, reflecting both performance and momentum.

Texas vs. California Economy

While Texas and California are both economic powerhouses, Texas offers lower operational costs, a central U.S. location, and a booming talent pipeline, without the regulatory burdens. Learn more in our full breakdown of the Texas vs. California economy.

Texas vs. Ohio Economy

Texas outpaces Ohio in the metrics that matter most for business growth—GDP, job creation, corporate relocations, and tax competitiveness. With a $2.7 trillion economy compared to Ohio’s $923 billion, broader industry diversity, and stronger infrastructure for global trade, Texas offers a more dynamic foundation for long-term expansion. Learn more in our full breakdown of the Texas vs. Ohio business growth.

Texas Economic Outlook

The Federal Reserve Bank of Dallas projects a 1.5% job growth rate for 2025, a strong signal of sustained expansion amid national uncertainties.

Future-ready industries and strategic initiatives are positioning Texas to lead for decades to come:

• Texas CHIPS Office is fueling the state’s rise in semiconductors.
• Texas Space Commission is building leadership in aerospace and defense innovation.
• Major infrastructure and energy investments include:
  • $148 billion in roadway projects
  • $5 billion Texas Energy Fund
  • $1.5 billion for broadband
  • $1 billion in water infrastructure

The World’s 8th Largest Economy

With a GDP that surpasses many of the world’s largest economies, Texas continues to lead with consistent, high-performing growth.

• $2.7 trillion economy, larger than Russia, Canada, and Italy
• Top exporter to 92 countries
• 9% of U.S. manufactured goods originate in Texas

Strength in numbers is matched by strategic investment and accessibility. Infrastructure in Texas includes critical assets like the Port of Houston—the nation’s leader in waterborne tonnage—and the Port of Laredo, the top inland port. The state also leads the U.S. in the number of commercial airports and freight rail miles, providing businesses with exceptional logistics advantages. Paired with low tax rates in Texas and fewer land-use restrictions, companies have more room to grow and scale efficiently.

For businesses planning their next move, Texas offers the reach, resources, and reliability to compete nationally and globally.