Driven by Oil and Gas, Texas Leads the Country in Economic Growth
Friday, July 28, 2017
Texas has the fastest growing economy in the United States, according to the Bureau of Economic Analysis (BEA). The Lone Star State was driven by gains from the mining sector, which in Texas predominantly includes oil and natural gas extraction and related activities.
Earlier this month, the BEA released its latest statistics on gross domestic product (GDP) by state for the first quarter of 2017. GDP growth in Texas was the largest of any state at 3.9 percent – almost an entire percentage point ahead of West Virginia, the state with the next largest GDP growth.
According to BEA, some industries saw minor growth nationwide, such as real estate and durable-goods manufacturing, while others declined, like retail trade. The industry that saw the largest growth in Q1 was mining, which grew an astonishing 21.6 percent. For comparison, the next largest growing industry in the first quarter of 2017 was manufacturing at 4.4 percent.
Mining played a key role in economic growth for the three top growing state economies in the first quarter: Texas, West Virginia, and New Mexico, respectively. Mining grew 2.08 percentage points in Texas, 1.75 percent in New Mexico and an impressive 3.20 percent in West Virginia. Other states, too, saw growth in the mining sector, such as Alaska at 2.49 percent, Oklahoma at 1.76 percent and North Dakota at 1.74 percent.
According to Baker Hughes, the number of active rigs in the United States has grown by 488 since July 22 of last year. In Texas specifically, Baker Hughes data show rig counts grew by over 80 in the first quarter of 2017 – from 327 on January 1st to 411 on March 31st. The Permian Basin, which stretches across West Texas into Southern New Mexico, saw the greatest increase in rig count of any oilfield, more than doubling from 217 in July 2016 to 463 in July 2017.
Industries associated with oil and gas development have flourished as a result of this growth, helping to further boost the Texas economy. For example, oil field services firm Halliburton announced that it had hired about 100 new workers each month this year to meet the demands of development growth in West Texas. Additionally, the company’s workforce in the region has grown by more than 33 percent to 2,700 employees.
It’s no surprise that oil and natural gas development plays a substantial role in Texas, but even in a difficult commodity market, it’s noteworthy how energy continues to drive the Lone Star State forward.