Is the “Texas Miracle” Losing Steam After Years of Record Population, Economic, and Job Growth?

Everything is bigger in Texas — its growth ambitions included. Affordable real estate, low taxes, and the promise of minimal government involvement in the lives and work of its businesses and residents have fueled what locals call the “Texas Miracle,” helping the state double its population since the 1980s. But as the state has gone mainstream, keeping that miracle alive for millions of new residents has become a challenge.

Call it a Miracle: Since 2015, the Lone Star state has ascended in American commerce, with over 300 corporations relocating from states like California, Illinois, and New York. With its newfound business leadership, Texas is one of the fastest-growing states in terms of job, economic, and population growth.

• Thanks to new corporate arrivals, Texas now boasts more Fortune 500 firms than any other state — 55 in total.
• Its popularity has hit a fever pitch, with five of the ten fastest-growing metro areas in the US being located in Texas — and its civilian workforce reaching a record 15.3M people in June.

Wish Upon a Star

Despite its successes, Texas may face hurdles in sustaining its growth. Last week, FT reported that the state’s appeal is diminishing among its 30M+ residents — and some of the hundreds of businesses that helped it become a formidable force on the national stage.

• Texas’s infrastructure is struggling to keep pace with its expansion — with issues in power grids, water utilities, and public services causing the state to fall out of the first five rankings in CNBC’s America’s Top States for Business last year.
• Companies drawn by Texas’s “business-friendly” reputation are now concerned about potential backlash from conservative politicians over issues like diversity and environmental policies.

Trouble in Texas: Texas has appreciated a lot of wins, but 2024 has marked a few losses. In April, Oracle announced that it would relocate from Austin, TX, to Nashville, TN — marking a rare departure from the state. In the following weeks, Tesla — which became Austin’s largest employer after relocating during the pandemic — laid off nearly 3K workers. State leaders have downplayed these events as unfortunate hiccups — but there’s a chance that Texas’s meteoric run might be out of steam — and it may need another miracle to maintain the growth it has seen.