TEXAS ECONOMIC GROWTH TRENDS

Office of the Governor – Economic Development & Tourism

Key Industries and Regions - 2014

Market Texas as a leading business location Advertising and business recruitment trips

Assist companies looking for sites or buildings in Texas

Provide business incentives

Factors Affecting Growth

Historical drivers of Texas growth expected to drive future growth

Climate Natural resources – Oil & gas Business environment Foreign trade – Mexico

Expansion of existing Texas businesses Attraction of out-of-state businesses

Past Decade of U.S. Job Growth

New York: 8%

California: 5%

Florida: 5%

Washington: 5%

Net New U.S. Jobs by Location, 2003-2013

Texas: 30%

Key Growth Industries in Texas Oil & Gas Extraction Manufacturing

Fabricated Metal Products

Machinery Refined Petroleum &

Chemicals

Professional Services IT Services & Data

Centers

Texas Crude Oil Production, 1981-2013

Oil & Gas

Texas rank in US: No. 1

85,000 jobs added in Texas (+44%) since 2010 Job multiplier effect: 2.7

Big share of Texas economy 14% of state GDP in 2012 vs. 7% in 2000

Key: Oilfield Services

Oilfield Services – Job Growth by Region (2010-2013)

Fabricated Metal Products

Texas rank in US: No. 2 24,500 jobs added in Texas (+22%) since

2010 Job multiplier effect: 2.3

Key: Steel Pipe and Structural Metals Supplying Oil & Gas industry and others

Fabricated Metal Products – Job Growth by Region (2010-2013)

Machinery

Texas rank in US: No. 1 16,000 jobs added in Texas (+39%) since

2010 Job multiplier effect: 2.6

Key: Oilfield Machinery

Oilfield Machinery – Job Growth by Region (2010-2013)

Refined Petroleum & Chemicals Texas rank in US: No. 1 5,500 jobs added in Texas since 2010

Multiplier effect: 8.5

Refined petroleum exports up 72% since 2010

Billions in new chemical plant investments planned on Texas Gulf Coast

Chemicals – Job Growth by Region (2010-2013)

Example Manufacturing Expansions in TexasCompany Sector Location Investm

entTenaris Steel Pipe Houston/Gulf $1.5 billion

Voestalpine Steel Corpus Christi$700

million

Borusan Mannesman

Steel Pipe Houston/Gulf$150

million

WeatherfordOil/Gas Machinery

Houston/Gulf$100

million

National Oilwell Varco

Oil/Gas Machinery

Houston/Gulf NA

Mitsubishi Heavy Ind.

Oil/Gas Machinery

Houston/Gulf NA

Dow Chemical Chemicals Houston/Gulf $2.5 billion

Exxon Mobil Chemicals Houston/Gulf $2.0 billion

Ascend Performance

Chemicals Houston/Gulf $1.3 billion

Manufacturing Highlights

Houston region dominating recent growth More than half of Texas’ new mfg. jobs since

2010

Midland-Odessa industrial base surging Manufacturing jobs up by one-third since 2010

Manufacturing growth weak in some small metros Tyler, Temple, Lubbock

IT Services and Data Centers Texas rank in US: No. 2 36,000 jobs added in Texas (+29%) since

2010 Job multiplier effect: 2.0

Key: IT Outsourcing and Software

IT Services – Job Growth by Region (2010-2013)

Example IT Services Expansions in TexasCompany Sector Location Jobs

Apple Electronics/Software

Austin 3,600

National Instruments

Electronics/Software

Austin 1,000

IBM Electronics/Software

Austin 900

USAA Corporate IT Dallas-Fort Worth 680

Company Sector Location Investment

Digital Realty Data Centers Dallas-Fort Worth$100

million

CyrusOne Data Centers Dallas-Fort Worth $45 million

Stream Data Centers

Data CentersHouston/Gulf Coast

$35 million

Summary

Industry Job Growth (since 2010)

Job Multiplier

Primary Regions

Oil & Gas 44% 2.7

Houston, Coastal Bend, Eagle Ford,

Permian Basin, North Texas

Fabricated Metals

22% 2.3 Houston, DFW, East Texas, Permian Basin

Oilfield Machinery

39% 2.6 Houston, DFW, Permian Basin

Refineries & Chemicals

7% 8.5

Houston, DFW Beaumont-Port

Arthur, Corpus Christi

IT Services 29% 2.0 Austin, DFW, Houston

Eric ClennonManager of Business Research

Economic Development and Tourism DivisionOffice of the Governor

eric.clennon@gov.texas.gov