Data: For many businesses, it’s Texas or bust
Texas gained more jobs than any other state during the 2010s as a result of businesses moving here, according to a report published Friday by the Federal Reserve Bank of Dallas.
More than 25,000 establishments moved to Texas from 2010 to 2019, bringing more than 281,000 jobs with them and resulting in a gain of nearly 103,000 jobs for the state, the Fed’s data show.
The San Antonio area — which the study defines as Bexar, Comal and Medina counties — accounted for 9,044 of the net jobs gained, with 18,455 coming from outside Texas and 9,411 leaving the state.
Federal Reserve Bank senior economist Pia Orrenius said the report’s findings were similar to those of a previous one and that she believes the trend will continue.
The report said Texas appeals to relocating businesses for multiple reasons, including its central location in the continental U.S., access to multiple large cities and business-friendly environment.
The state has also offered various incentive programs, including the Texas Enterprise Fund — one of the nation’s largest state programs to attract businesses — and the now-expired Chapter 313 program, which gave companies a tax break for 10 years in exchange for a commitment to contribute to local economic growth and school districts.
However, research from the Dallas Fed found that attractive economic fundamentals — such as low taxes, fewer regulations, a growing population, a relatively lower cost of living and less union activity — are far more important than incentive packages when businesses make decisions regarding location and expansion.
A survey of such studies found that at least 75% of incentivized firms “would have made a similar location, expansion or retention decision absent the incentive,” the report said.
The state’s robust economic growth hasn’t come without side effects. As Texas’ population and economy boomed, its home prices and rents skyrocketed, putting more pressure on renters and making it increasingly difficult for tenants to become homeowners. Housing production hasn’t kept up with household growth, U.S. Census data shows, contributing to the state’s steep rise in housing costs.
California was the largest net exporter of jobs nationally, with Texas being a favored destination for businesses leaving that state. Others included Louisiana, New Jersey and Oklahoma.
The report also found that professional and business services accounted for about 30% of jobs migrating into the state, followed by 17.7% from manufacturing and 17% from trade, transportation and utilities.
The Texas economy created about 1.4 million jobs and lost 1.2 million jobs per year from 2010 to 2019, resulting in an average net gain of about 216,000 jobs per year. Business relocations accounted for a relatively small percentage of overall job creation and loss during that time.
Most migrating businesses landed in larger metropolitan areas, such as Dallas, which saw the largest in-migration of jobs with 89,599, and Houston, which had the largest net migration of jobs with 36,095. San Antonio had the fifth-largest net migration, also trailing the Forth Worth area with 17,714 and College Station with 9,980.
Urban areas attracted 53% of arriving businesses, with suburban and rural areas capturing 36% and 12%. Small businesses, particularly those with fewer than 500 workers, accounted for about three-quarters of jobs migrating to Texas.
While the number of business relocations are significant, they represent only a small portion of the overall number of establishments in Texas, about 0.04%, the report said.