TEXAS

Texas, located in the south central part of the United States, is a state dedicated to economic growth on both the domestic and global fronts. As the second largest state in terms of geography (totaling 268,581 square miles)¹ and population (24,178,180 people projected for 2008)², Texas is prized for its economic, geographic, and cultural diversity. The Texas economy is one of steady advancement and reliability, making it a global leader in international trade. Texas is home to a variety of industries, ranging in size from small businesses to top Fortune 1000 companies. With its strong local, regional, and state economies, Texas is extremely promising for future global investment and commerce.

Economy

Texas has the second largest economy in the United States, with a total gross state product in 2007 valued at $1,141,965 billion.³ If Texas were considered an independent nation, its economy would rank as the 13th largest in the world according to the International Monetary Fund World Economic Outlook 2007.⁴ Houston, the state’s largest city, alone supported an economy of $416.6 billion in 2007;⁵ if the Houston area were an independent nation, its economy would rank 22nd in the world ahead of Switzerland, Norway, Saudi Arabia, and Austria. Texas’ various sectors represent a wide range of industries, including energy and oil, IT, health care, specialty retail, engineering and construction, transportation, food processing, manufacturing, chemical production, and telecommunications.

Trade

Trade is Texas’ largest industry. In 2007, Texas was ranked for the sixth year in a row as the number one state by export revenues, which totaled $168 billion topping $150.8 in 2006.⁶ The state’s top value-added exports last year were chemicals, computers and electronic products, machinery, transportation equipment, and petroleum and coal products.⁷ Texas ranks as the second largest exporter to Egypt trading $711 million and $906 million worth of goods in 2006 and 2007 respectively. Texas’ top exports to Egypt include machinery, chemicals, petroleum and coal products, food and related products, and metal manufacturing.

Workforce

As of 2008, Texas lays claim to a total of one hundred and thirteen Fortune 1000 companies’ headquarters, fifty-eight of which are Fortune 500 companies. According to the Bureau of Economic Analysis for 2007, Texas was ranked twenty-second in the U.S. for the largest per capita personal income (PCPI) which was valued at $37,006, just below the national average of $38,564.⁸ With 75% of Texas households having at least one full time working member, unemployment in Texas has declined in the past few years, down from 5.8 percent in 2004 to 4.7 percent in July 2008, despite seeing a slight jump from 4.4 in June 2008 due to the global economic crisis.⁹ Nonetheless, 17,500 nonagricultural jobs were created in the same month. Leisure, hospitality, natural resources and mining jobs all saw increases in the last year. In 2002, there were 1,734,648 minority-owned firms, making Texas a national leader in promoting racial equality among businesses.¹⁰

In comparison, the city of Houston is home to twenty-three of these Fortune 500 companies and is listed in Fortune Magazine as having 100 of the fastest growing firms in the United States. The median income estimate for households in 2008 for Houston averaged at $61,150.¹¹ Houston is also an entrepreneurial center for 76,452 small businesses which collectively employ 1 in 4 area workers providing $20.2 billion in annual salaries.¹²

Industry

Texas historically produced cotton, cattle, and timber alongside a dominant petroleum sector as the main source of economic income. However, a global recession lead by the oil industry in the 1980’s gave way to a diversification of the economy. Today, the leading sectors in terms of employment and annual revenues with strong growth potential are as follows: aerospace and defense, advanced technology and manufacturing, biotechnology and life sciences, energy, information and computer technology, and petroleum refining and chemical production. In general, manufacturing shipments in 2007 reached $168.2 billion, a 70% increase from 2003, and surpassing California as the leading manufacturer in the United States.¹³ Texans depend on trade and commerce as their livelihood; 6.7% of the private sector employment is linked to export shipments.

Agriculture

With terrain ranging from forest to prairie to desert, Texas is known for its flat and “wide open spaces” which makes the state stand out as an ideal location for agriculture, factory, and business development. Agriculture in Texas hit a record year in 2007 generating over $100 billion in economic impact and surpassing previous highs of $85 billion in 2004; the industry supports a robust two million employees and accounts for nine percent of the gross state product.¹⁴ Texas is also the number one state in the nation for the raising, growing, and/or production of cattle, cotton, sheep, goats, wool, mohair, horses, hay, and deer. Texas’ top valuing crops include greenhouse and nursery plants, corn, grain, sorghum, and wheat.¹⁵

Strategic Location

Texas’ strategic geographic location enhances the state’s image as a major international hub of commerce. Centrally located, Texas borders Mexico to the south and the Gulf of Mexico to the west. Lining the U.S. border in Northern Mexico, there are thousands of foreign owned maquiladora manufacturing or assembly plants that offer inexpensive labor and, thanks to the North American Free Trade Agreement (NAFTA), almost nonexistent tax or custom fees. Texas’ Gulf Coast is lined with over 1000 ports, the largest of which is the Port of Houston which is ranked first in the United States in foreign waterborne tonnage, and over 1000 miles of channels and waterways, including the impressive Houston Ship Channel.¹⁶ The Port of Houston Authority further claims that channel-related businesses support 785,000 jobs throughout the state bringing in $118 billion in economic impact. A dense web of railway systems easily connects all regions of Texas to the major business and shipping centers on the United States’ eastern and western coasts.

Houston Business Mission

Due to Houston’s strategic location and welcoming environment for international business, Congresswoman Sheila Jackson-Lee (D-18th District) invited a group of 17 businessmen, women, and members of AmCham Egypt’s Board for a trade mission on 19-20 November, 2007. The mission was jointly organized by the Bilateral U.S. Arab Chamber of Commerce, The Greater Houston Partnership, and sponsored by active AmCham Egypt members, the Apache Corporation and Exxon-Mobil. The goal of the mission was to promote economic opportunities in Egypt as well as explore potential new partnerships in vibrant U.S. cities. On the mission, AmCham delegates met with local officials, held meetings with industry-specific representatives, and attended matchmaking events that encourages business and trade between Egypt and Texas.

Houston Mission Report 2007