Despite the importance of its energy, food, and fiber, the Texas economy is increasingly services oriented. This outcome is not surprising given the sophisticated nature of the state’s industrial base; it’s a pattern common to every highly developed economy. Let’s examine past and expected future trends.
You can basically think of private-sector activity as falling into two big buckets – goods-producing and services-producing industries. Goods-producing sectors include manufacturing, construction, agriculture, and mining (which encompasses oil and gas extraction). Services is everything else.
Twenty years ago, services comprised approximately 63% of employment and almost 55% of real gross product (RGP) in Texas. In 2021, we estimate that it had grown to 69% of employment and about 60% of RGP. Twenty years from now, our projections indicate that it will be nearly 73% of employment and still about 60% of RGP.
