Texas’ economic forecast looks to be bullish for 2022. A recent report, released by Texas A&M’s Texas Real Estate Research Center, tracked growth through the second quarter of 2021, and includes an encouraging forecast for 2022. A 6.4% increase in gross domestic product for Texas is tied to the continuing pandemic recovery and was bolstered by an uptick in the oil industry. Unemployment claims are down, and retail sales are fast approaching record numbers.
Despite the Delta variant and the continued concerns surrounding additional Covid strains, Texas economic activity grew sharply through the months of September and October. To maintain this momentum, Texas based companies have had to overcome global supply-chain constraints, as well as difficulties in hiring and retaining workers. Even still, employment continues to be a bright spot. September in Texas saw payrolls increase an annualized 8.8%. This was a welcome bump to August’s 3.0% figure, still well above the 2.6% national average for the same month.
The growth seen in recent months for Texas was quite well-rounded. Several industries, previously in decline, have rallied to close strong in 2021. The Leisure, Hospitality, and Construction sectors each reported declining numbers in August, but all subsequently rose several percentage points in September. Prices for construction materials decreased in October, and the housing market noted an intriguing rise in the sales of homes priced above $400,000.
The latest economic forecasts for Texas project the state will see record growth numbers in 2022. The Dallas Fed’s Texas Employment Forecast predicts 5.1% growth by the close of 2021, shattering the state’s previous long-term trend of 2.0%. With the labor shortage beginning to let up, Texas’ numbers could even exceed those anticipated in the forecast.
Here’s where the news gets really good. New business start-ups in Texas are on the rise. Austin was recently cited as the second-best city in the nation to start a new business. With 80% of new businesses remaining solvent past their first year (2% above the national average), Austin is a great place to begin start up. Another feather in our cap is the straightforward route to LLC ownership, as Texas has earned a reputation for being one of the least intensive paperwork states. Texas’ regulatory climate in general is well-known for been hands-off, creating an inviting atmosphere for prospective start-ups. Federal regulations and red tape exist the same as any other state, of course, but overall Texas enjoys a notoriously business-friendly climate. Texas new business growth has been impressive in the face of the pandemic’s challenges, and this progress doesn’t appear to be slowing down any time soon.
In North Texas, home of FranNet of DFW & Oklahoma, Dallas recently made the list of the Top-4 up-and-coming cities for the tech industry. It’s a pretty exciting development, as it’s a good indication that skilled labor is moving in to stay. Texas offers the same wage rates for techies, but with a considerably lower cost of living than Silicon Valley. The region’s low-tax environment and inventory of affordable housing has proved to be inviting atmosphere for new business start-up prospects—not just for the founders themselves, but the legions of team members who eventually follow.
The perks of starting a new business in Texas and an overly friendly pro-business climate has rendered the state 9th in the world in terms of GDP—producing more annual revenue than many developed countries.
If you like what you’ve read and want to explore how your own start-up will fare in 2022, FranNet of DFW & Oklahoma can introduce you to the world of franchise ownership. Together, we can investigate the proven business models of concepts that perfectly align with your lifestyle and financial goals. And it won’t cost you a dime, as all of our consultation services are no-cost and no-obligation.
Reach out and schedule an initial visit today. Let’s keep Texas looking strong in 2022!