Migration Patterns Drive Economic Growth in Texas
The Texas economy consistently grows faster than the nation's. The secret behind that growth is the state's ability to start and attract businesses, and to win and keep the workers they need. This business dynamism and pull on talent are what some call the "Texas miracle".
Number one for net migration
The Lone Star State ranks first among all US states for the number of net domestic migrants, and first among the most populous states for its net migration rate. Yet Texas is the fastest-growing state in the USA less because of high gross in-migration than because of its low gross out-migration.
What sets Texas apart is how few people leave for other states. Texas has the lowest out-migration rate of any state for US residents, for all domestic migrants and for Mexican immigrants. A 2018 study by the Federal Reserve Bank of Dallas found that Texas has the highest retention rate of any state: 82 percent of people born in Texas still live there.
A high rate of business formation
Economic dynamism is another key to the Lone Star State's success. Only Utah beats the net business formation rate of Texas. That high rate comes mainly from the sheer number of new businesses rather than from a low number of closures. Like its formation rates, the net job creation rate in Texas is a positive outlier, driven by fast job creation and comparatively little job destruction.
Migration, workforce retention and business formation together are what sustainable economic growth needs, especially given current economic and demographic trends. And these are exactly the areas where Texas shines.
Newcomers grow the talent pool
Migration fuels business growth because it brings workers to places where labor is relatively scarce. Migrants in particular boost population and workforce growth, bring skills that are in demand and help ease labor shortages. That is how migration encourages businesses to start and expand, leading to more business investment and faster job creation.
Keeping the existing workforce in the state can have similar effects, but the skills of those who stay are tied more directly to the state's education system. Whether it is academic preparation or workforce training, the quality and variety of high schools, community colleges and universities matter more in a state that keeps its students than in one that watches them leave.
Drawn to the Lone Star State?
Texas as a business location has earned an outstanding reputation. Companies from all over the world are expanding or relocating to the Lone Star State. If you want to take the step of expanding into the USA and have no preferred location, we recommend Austin, Texas, which is also where Mount Bonnell Advisors is based. The Texas capital offers not only a business-friendly environment but also a high quality of life.
Mount Bonnell Advisors is happy to be your expert, English-speaking contact for your plans to enter the US market. Drawing on years of hands-on experience, we help you answer the key strategic questions, especially around US legal entities, US visas and tax matters. You'll find more stories under News.
Consultation & implementation
If you'd like to find out what this means for your own situation, the best step is to book a consultation.
