As much of the world’s economic growth is expected to slow in the near future, two cities in Texas look to be turning that projection on its head.
Oxford Economics’ analysis projects nearly two-thirds of the world’s major cities will see an economic slowdown over the next two years. It also predicts declining gross domestic product growth in the world’s 10 largest cities.
But Dallas and Houston along with San Francisco buck the trend because of the technology industry and their highly skilled workforces. Oxford’s analysis projects the two Texas cities will continue to see growth despite a slowdown elsewhere.
The analysis predicts Dallas’ GDP to grow by 2.2 percent between 2020 and 2021. That increases to 2.4 percent for both Dallas and Houston if projections are pushed out to 2023.
So what’s happening in the Lone Star State that enables these cities to grow as other areas are experiencing slower growth?
“In San Francisco, growing demand for computing power and high-tech services offsets California’s highly regulated economy and housing costs,” says the Dallas Morning News, but in Texas, the cost of living is lower and the lower cost and less restrictive regulation allow businesses to grow faster.
Carlton Schwab from the Texas Economic Development Council echoes that some factors that draw residents to Texas are the low cost of living and the mid-country location. In recent years, several major corporations have also relocated their headquarters to or are setting up expansion offices in Texas.
“The mix of both affordability and sturdy job growth has attracted new firms and residents,” the Dallas Morning News reports. “This generates outperformance within locally-oriented industries, such as construction, retail trade, real estate and health care, to supplement the benefit of new companies moving in.”
According to the Greater Houston Partnership, “Houston’s success as a top global market for headquarters is driven by its deep talent pool, low cost of living and doing business, an exceptional quality of life, and our unique connectivity to destinations across the country and around the world.”
Economist Ray Perryman told the Houston Chronicle, “The state continues to be a leader in new locations and is seeing significant growth in all types of technology production and services. It is also seeing growth in key service sectors and an expanding international footprint.”
This article was first published by The Center Square.