Texas’s economy fared far better than most of the U.S. during the downturn, and it’s rebounding strong as well. The state has been already adding jobs since the fall for 2009 according to The Big Money (TBM).
What gives? Is it all oil? Nope.
1) It’s due to better housing regulation, which helped keep the state’s mortgage delinquency rate below the national average:
That’s partly because relaxed zoning codes and abundant land kept both price appreciation and speculation down. “House prices didn’t experience a bubble in the same way as the rest of the nation,” said Anil Kumar, senior economist at the Federal Reserve Bank of Dallas. But it’s also because of two attributes not commonly associated with the Longhorn State: financial restraint and comparatively strong regulation.
2) The state also has a larger amount of non-oil-related exports than many people realise:
Manufactured goods like electronics, chemicals, and machinery account for a bigger chunk of Texas’ exports than petroleum does. In the first two months of 2010, exports of stuff made in Texas rose 24.3 per cent, to $29 billion, from 2009. That’s about 10 per cent of the nation’s total exports.
3) And as far as energy industry growth is concerned, natural gas and wind are growing while oil is in decline.
In November 2009, Texas [oil] wells produced 1.08 million barrels per day, about half as much as they did in the late 1980s. In recent years, natural gas has been undergoing a renaissance. The state’s production rose about 35 per cent between 2004 and 2008. And Texas has received a big boost from a different, renewable source of energy: wind.
In this area, Texas’ size and history of independence has enabled it to jump-start a new industry. The state has its own electricity grid, which is not connected to neighbouring states. That has allowed it to move swiftly and decisively in deregulating power markets, building new transmission lines, and pursuing alternative sources. “We can build transmission lines without federal jurisdiction and without consulting other states,” said Paul Sadler, executive director of the Austin-based Wind Coalition.
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