Economy

Texas has one of the largest and most diverse economies in the United States of America. Service industries account for the largest part of Texas’s gross domestic product. Until the beginning of the 20th century the economy of Texas was based on farming, ranching, and lumbering. Then, in 1901, large-scale production of petroleum began following discovery of the Spindletop oil field near Beaumont. Since then, the economy of Texas has become closely bound to the production and distribution of petroleum, petroleum products, and natural gas and to such related industries as petroleum refining and the making of petrochemicals.

Since roughly mid-century, diverse manufacturing industries have been established in the state. Especially notable are those in the electronic chemical, food-processing, machinery production and aerospace fields. Today, about 14 per cent of the nonagricultural labor force is engaged in manufacturing. Wholesale and retail trade, finance, the service industries, and government also employ large numbers of persons. The corporate headquarters of many of the country's largest companies are based in the Dallas-Fort Worth and Houston areas.

These changes in the Texas economy reflect the demand, both from within and from outside the state, for an ever-widening variety of products. Abundant resources, especially petroleum and natural gas, a large labor force, relatively low wages, and large amounts of investment capital have helped bring about these changes.

The natural wealth of Texas includes large mineral deposits, especially petroleum and natural gas; it also has fertile soils and rich grasslands. There are layers of rock containing beds of lignite that cover about 75,000 square miles (194,000 square kilometers), extending from Laredo to Texarkana. Iron ore is found in the eastern part of Texas. There are large asphalt deposits near Uvalde and potash is found in the Basin and Range Region. Molybdenum, titanium, and uranium are found in the southern and western parts of the state. There are also deposits of basalt, fluorite, fuller's earth and other clays, granite, helium, lead, marble, and talc to be found in Texas. Texas has more than 1,200 types of soil. Such variety enables farmers to grow many kinds of crops. There is a narrow belt along the state's Gulf Coast that has marshy soils, mixed with clays. Rich, heavy black land clays constitute a belt in the interior of the plains. The High Plains and the Rolling Plains are clays, clay loam, and sandy loam soils, whereas the Basin and Range Region has rough, stony mountain soils.

Texas ranks among the top five manufacturing states by value of total output. While some industry is found throughout the state, most is centered in two areas: the Gulf Coast and the Black Prairie belt. Commodities produced in Texas have a value added by manufacture of approximately $150 billion a year. No other state except California and Ohio employs more manufacturing workers than Texas. In terms of value added by manufacture, chemicals are Texas’s leading type of manufactured product. Benzene, ethylene, fertilizers, propylene, and resins are important chemical products. Texas’s chemical industry operates mainly in cities along the Gulf Coast.

Petroleum refining is still one of the major industries, but the largest in employment and value of production is the manufacture of chemicals, including petrochemicals. Petrochemical plants use refinery products as raw materials, and a complex network of pipelines connects refineries and petrochemical plants. Among the petrochemical products are synthetic rubber and fibers, plastics, detergents, and fertilizers.

Texas takes the first position among the states in oil refining. About 25 petroleum refineries operate throughout Texas. There are large refineries along the Gulf Coast in Baytown, Beaumont, Houston, Port Arthur, Texas City, and other port cities. One of the largest petroleum companies in the world, Exxon Mobil, has its headquarters in Irving.

The manufacture of transportation equipment is centered around Dallas-Fort Worth. Products include not only automobiles and trucks, but military and civil aircraft and boats and ships. Other important industries include manufacture of machinery, particularly construction and oil-field machinery; refrigeration and heating equipment, processed foods, computers, electrical and electronic equipment, primary metals, fabricated metal products, clothing, aluminum, cement and concrete, paper, stone, clay, and glass products; and printed and published materials. Machinery manufacturing is centered in areas such as Austin, Dallas, and Houston. The leading fabricated metal products made in Texas are industrial valves, machine shop products, and sheet metal. A major producer of electronic components and military communication systems, Texas Instruments, is based in Dallas and has plants in several Texas cities. Dell Inc. is a leading computer manufacturer and is based in Round Rock near Austin. The greatest income for the food-processing industry is provided by meat products. Baked goods, beverages, dairy products, preserved fruits and vegetables, and snack foods are important. There are many bakeries in Dallas-Fort Worth and Houston areas. The leading beverage product is soft drinks.

The commercial forests of eastern Texas supply wood for paper mills and for a wide variety of manufactured items.

Community, business, and personal services are the leading service industry in Texas and contribute more to the gross state product than any other economic activity. These services include private health care, law firms, engineering companies, and repair shops. An important part of this industry group is the engineering companies that service oil and gas companies.

Next are the finance, insurance, and real estate service industries of Texas in terms of the gross domestic product. In most areas of Texas, the buying and selling of buildings and other property is an important part of the economy. The chief financial centers in the state are Dallas and Houston. Dallas forms the headquarters of many insurance companies.

The third most important service industry is trade, restaurants, and hotels. The wholesale trade of food products, motor vehicles, and petroleum products is significant in Texas. Retail businesses are automobile dealerships, clothing stores, department stores, gas stations, and grocery stores. The Dallas-Fort Worth area is the base for several major retailers, including the companies that own J. C. Penney, 7-Eleven, and RadioShack stores. Nearly three-fourths of the Texas’s hotel and motel income comes from the Austin, Dallas-Fort Worth, Houston, and San Antonio areas.

Government services rank next among the service industry groups of Texas. This group includes the operation of public schools, public hospitals, and military bases. The public school system provides major employment in the state. The San Antonio area is home to Fort Sam Houston and several United States Air Force bases. The federal government operates the Johnson Space Center in the Houston area. Austin, the state capital is the base for State government offices.

In fifth position are transportation and communication. Trucking companies contribute most of the income for the transportation sector. There are many shipping companies that operate along the Gulf Coast. American Airlines, Continental Airlines, and Southwest Airlines have headquarters in Texas. The leading industries of the communications sector are telecommunications and publishing companies.

Texas is second in the nation after California in total value of agricultural output. About 80 per cent of the state is occupied by ranches and farms. Less than 15 per cent of the farmland is used for crops; the rest is used mostly for grazing livestock. Some of the ranches are extremely large, covering 150,000 to 1,000,000 acres (60,700 to 404,700 hectares). These large “spreads,” however, are far less common than in the past. There are large areas of irrigated cropland in the Panhandle and in the lower Rio Grande Valley.

The more than 200 crops raised in Texas account for about 35 per cent of the total agricultural income. In most years, the state ranks first in the production of cotton and wool and second in the production of grain sorghum. Cotton is grown in most Texas counties, but principally in the Lubbock area, the Black Prairie belt, and the lower Rio Grande Valley. Most of the crop is grown with the aid of irrigation. Texas cotton survives best on the coastal plain and in the Great Plains region. Jared Groce, sometimes known as the “Father of Texas Agriculture”, and other early settlers introduced commercial cotton growing. They planted cotton in the fertile valley of the Brazos River during the early 19th century. Cottonseed, used to make livestock feed and vegetable oil, is a valuable by-product. Corn, grain sorghum, hay, wheat, and rice are also major crops. Rice is produced in the coastal lowlands, and is entirely dependent on irrigation.

Corn is cultivated mainly in the Panhandle and in the Prairie Plains region. Most of the grain sorghum in the state is grown in the Panhandle and in South Texas. Grain sorghum and hay chiefly constitute as cattle feed. The eastern Gulf Coast is the main area for growing rice. Most of the large wheat farms are in northern Texas. Other field crops grown are oats, peanuts, potatoes, soybeans, sugar beets, and sugar cane.

Southern and eastern Texas is nationally famous for the production of fruits and vegetables, particularly winter and early spring varieties. The lower Rio Grande Valley grows grapefruit and oranges, as well as carrots, cabbage, honeydews and cantaloupes. The socalled Winter Garden area west of San Antonio and the area around Corpus Christi are also prominent fruit and vegetable sources. As temperatures in the valley usually remain warm during winter, crops can be grown all year round.

The leading source of agricultural income in the state's urban areas is greenhouse and nursery products, which include flowers, ornamental shrubs, and young trees. Texas leads in the annual income from greenhouse and nursery products.

Texas is one of the leading states in the production of nuts. The most important nuts harvested in the state are pecans. Pecan trees grow along rivers and streams throughout most of Texas, except in the High Plains and the Basin and Range Region.

In the Panhandle and in north-central Texas feed grains, wheat, and hay are major crops. Part of the grain is not harvested, but is left in the field for grazing.

Texas leads all other states in numbers of cattle, sheep, and goats. Cattle are raised throughout Texas, but primarily in the eastern half of the state. Sheep and goats are almost entirely limited to the Edwards and Stockton plateaus. No other state has as many sheep as Texas, and it leads the United States in wool production. Nearly all of the nation's production of mohair comes from Angora goats raised in Texas. Large numbers of poultry, including broilers and turkeys, are also raised in the state.

Texas's largest source of farm income comes from beef cattle, providing nearly half of the annual total. Texas leads the other states in the nation in number of beef cattle. Cattle can graze outdoors all year around due to the mild Texas winters. During the late 19th century, ranchers raised large herds of a breed of beef cattle called “Texas longhorns”. Breeds such as Herefords and Aberdeen-Angus gradually replaced the longhorns. Now, Texas longhorns are used chiefly for crossbreeding purposes and to produce low-fat beef.

The leading dairy farming area is the northeastern part of the state. There are many chicken and egg farms in eastern Texas. Most of Texas’s hog farms are in the central plains and Panhandle. Farmers also raise honey bees and horses.

Texas leads the country in value of mineral production, ranking first in crude petroleum and natural gas. Oil and gas provide the greatest part of the total mineral production by value. Around one-fifth of the oil produced in the United States comes from Texas. Almost every county in the state produces some oil or gas, but the heaviest output comes from fields in the Panhandle, the Gulf Coast, and other areas in the eastern part of the state. The leading oil-producing area in Texas is a belt that runs from Hockley County to Pecos County in west Texas. This area lies above an underground region called the Permian Basin, which contains vast deposits of oil and gas. Proven oil reserves rival those of Alaska as the largest in the nation.

Close to one-fourth of the natural gas produced in the United States comes from Texas. The leading counties in the state in natural gas production are Webb and Zapata counties in the south. There are large gas fields also in Panola and Wise counties and in the Panhandle. There are pipelines that carry Texas’s natural gas to major urban areas such as New York and Chicago.

Texas is also the leading producer of sulfur. Production is from underground domes and from natural gas and petroleum processing and refining operations. Magnesium, used principally for making light-weight alloys, is obtained by extraction from seawater and from underground brine. In the Panhandle are several processing plants that extract helium from natural gas.

Other minerals include coal, cement, salt, used primarily in the state's chemical industry; sand and gravel, lime, clays, crushed stone and gypsum. Some natural asphalt, used in road construction, is produced in Texas. There are limestone quarries that provide most of Texas's cement, crushed stone, and lime; the largest of these quarries lie near the major cities. Limestone, sand and gravel are used to manufacture concrete and construct roads. Sand and gravel are dredged from riverbeds and dug from pits. Coal is found in the surface mines in southern and eastern parts of Texas. The salt production in Texas is mostly in the Houston area.

The state’s utilities supply electric, gas and water service. It ranks first in the U.S.A. in electric power production. Nearly half of the electric power generated in Texas is produced from power plants that burn natural gas and more than one-third comes from plants that burn coal. The rest is mostly generated by nuclear plants.

By the value of its catch, Texas is among the nation's top five states. It has an annual fish catch that is valued at more than $165 million. Shrimp account for all but a tiny part of the catch's value; the rest comes mainly from other shellfish, especially oysters and blue crabs.. It is one of the leading states in the production of shrimp. Other fish that make up the catch are Atlantic croaker, black drum, groupers, and red snapper. Farm-raised catfish is also produced in Texas.

Texas has the largest network of primary and secondary roads in the United States. The primary system, which connects all major Texas cities, includes eight Interstate routes and many miles of other multilane divided highways. There are about 300,000 miles (483,000 kilometers) of roads and highways in Texas and about 3,200 miles (5,200 kilometers) of the interstate highway system cross Texas. Railway mileage is also the largest of any state, but, as in most other states, has declined for many years. Dallas-Fort Worth and Houston are the chief railway hubs. The first railway in Texas was built in 1852 and 1853 between Harrisburg (now part of Houston) and Richmond. There are about 45 railway lines now that provide freight service in Texas.

Six major ports serve Texas. Houston, connected to the gulf by the 50-mile (80-km) Houston Ship Channel, is the state's largest port and ranks among the busiest ports in the country. Beaumont, Baytown, Corpus Christi, Texas City, Port Arthur, and Freeport also handle heavy cargo tonnages. Crude petroleum is overwhelmingly the leading import; refined petroleum products, chemicals, and grains are among the chief exports. The Gulf Intracoastal Waterway, paralleling the coast from Brownsville to the Sabine River and eastward, carries much cargo on barges and other shallow-draft vessels.

Dozens of domestic and foreign airlines provide scheduled air service in Texas. International airports at Houston, Austin, El Paso, San Antonio, and midway between Dallas and Fort Worth attract the largest number of carriers. The Dallas-Fort Worth Regional Airport is one of the busiest airports in the nation.

A Mexican named Jose Alvarez de Toledo printed Texas's first newspaper, Gaceta de Texas, in Nacogdoches in 1813. Today, there are more than 500 newspapers, of which about 85 are dailies. The largest circulations belong to the Austin American-Statesman, The Dallas Morning News, the El Paso Times, the Fort Worth Star-Telegram, the Houston Chronicle, and the San Antonio Express-News. WRR, the first radio station in Texas, began broadcasting in Dallas in 1920 and the WBAP-TV (now KXAS-TV), the state's first television station, started in Fort Worth in 1948. There are about 900 radio stations and 110 television stations in Texas now.