Why Do Businesses Love Texas?

It’s no secret: Business is booming in Texas. The state has the world’s eighth-largest economy, supported by a favorable business climate, robust supply chains, major corporate relocations (Apple, Space X, Oracle, Chevron, Charles Schwab, and Tesla, to name a few), and significant foreign direct investment from countries like the United Kingdom, Germany, Canada, and Japan.

According to the Texas Economic Development Corporation, the state has been experiencing significant investment across a variety of industries in recent years, including:

• Technology and IT
• Advanced Manufacturing
• Energy (renewable as well as oil/petroleum)
• Life Sciences and Biotechnology
• Aerospace and Aviation

All of this business investment also brings new jobs, and the state has also become one of the most popular destinations for both domestic and international migration.

What Makes Texas So Appealing to Businesses?Does Texas Have Any Weaknesses?

No state is perfect, of course, and Texas does have a few challenges to overcome that impact its businesses and workforce, including:

• Property Taxes: Despite what you might assume given the state’s business-friendly tax policy, Texas had the seventh-highest average effective statewide property tax rate in the nation in 2025 at 1.58%, according to a study published by WalletHub. This is nearly as high as New York State (1.6%).
• Utilities: Texas has an unreliable power grid that has failed during significant weather events like the winter storm of February 2021, which left millions of people and businesses without power for days. Its water supply also faces multiple threats, including aging infrastructure that will cost billions of dollars to fix and vulnerability during power outages.
• Wages: While the cost of living in Texas is still low compared to other states, it has been increasing, and wages don’t appear to be keeping up. According to data released by the US Bureau of Economic Analysis via FRED® and Federal Reserve Bank of St. Louis, the state’s per capita personal income of $68,000/year was the lowest among the six US states with economies greater than $1 trillion in 2024 (California, Florida, Illinois, New York, Pennsylvania, and Texas).
• Poverty: Houston has the highest poverty rate of any large US metropolitan area (21%) and San Antonio has the third highest (13%), according to the US Census Bureau’s 2023 and 2024 data.

However, these weaknesses obviously do not outweigh Texas’s benefits (at least for now), and the state has remained firmly at the top of economic growth and innovation top 10 lists for years (including our own top 10 list of states with the highest economic momentum!).

Are you looking to better understand your region or state’s economic strengths and weaknesses in order to develop effective strategies for attracting new business investment and a skilled workforce to support that investment? Camoin Associates can help.

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About the Author

Jilayne Jordan is the Graphics and Communications Specialist at Camoin Associates. She spent most of of her 30-year career in the public sector, working for local and state government agencies across three states on transportation, parks and recreation, economic development, affordable housing, homelessness, and small business support projects and initiatives. In 2022, she left the public sector and came to work for Camoin Associates, where she edits (and occasionally writes for) the company’s Economic Development Navigator blog and works on a projects for clients across the nation. She holds a Bachelor of Arts degree in Journalism with a public relations emphasis from Humboldt State University.