Topic 7

The Economies of Texas-Earning a Living

Goals:

• describe the patterns of agriculture and economic activities in Texas
• understand the changing nature of the economy of Texas, changes in trading patterns, and the consequent effects on the population
• trace the processes & relationships which have created the patterns and are driving changes, e.g., globalization of economy, economic restructuring, relationships which govern agricultural land use (von Thunen), increasing spatial concentration of wealth, etc.

I. Agriculture

(i) Patterns: a tour through maps

(ii) von Thunen: agricultural land use

(iii) Farming in the 90s: technology transforms agricultural industry

• today's farmers
• growing need for agricultural services
• productivity climbs
  • high tech agribiz
  • diversification
• conservation and agriculture
• farming as a system: inputs, outputs, flows (energy), boundaries, subsystems, linkages

II. The economy of Texas

In the past...

heavy emphasis on raw materials

Now...

economic integration. TX looks more like rest of US. TX economy linked to human resources more than natural resources

e.g., share of gross state product grounded in services vs. goods

1980 57% ; 1993 72%

TX economic growth expected to be better than US average--WHY?

geographic advantages:

central Sunbelt location, mild climate, strategic location vis a vis trade, pro-business climate, lower-than-average business costs

TX Economy in the past: peak, valley, and plain

1982-1992: employment growth only 1.5%/yr

Diversification

Oil & Gas 27% gross product 1981

12% gross product 1993

11% gross product 2000

Construction? Manufacturing? High Technology?

Biggest losses in manufacturing, '82-'92:

oil and gas field machinery (50,000 jobs)

petroleum refining (12,000 jobs)

clothing (12,000 jobs)

blast furnaces/steel (8,000 jobs)

Biggest gains?

plastic products (11,000 jobs)

surgical, medical, dental equip. (8,000 jobs)

measuring/controlling devices (7,000 jobs)

electronic computers/business machines (5,000 jobs)

paper products (4,000 jobs)

plastic materials/resins (3,000 jobs)

poultry slaughtering & processing (3,000 jobs)

pharmaceuticals (3,000 jobs)

Future?

• Adding 14,000-15,000 new jobs/year
• Shift to durable goods; losses in defense, oil field equip., petroleum, textiles and apparel
• Globalization of world economy changing the rules.
  • R & D very important
  • Texas in ideal position to capitalize on Latin American trade
  • Patterns of trade?
  • Graph of US vs Texas Economic Growth, 1990-2000

Other Texas-wide generalizations:

• sports are big
• biggest TX companies aren't Texan

REGIONAL ECONOMIES OF TEXAS (see notes in ARGOT)

different growth factors, distinctive work forces, industrial bases, & infrastructures

1. Gulf Coast: manufacturing, oil & gas production, & government. Port of Houston.

2. South East Texas: oil & gas production, forest products, food processing. Prisons

3. Central Texas: government and manufacturing. Electronics and higher education

4. Metroplex: trade, transportation, finance. Broadly diverse economy but with key industries in air transportation, manufacturing, electronics

5. Upper East Texas: manufacturing, oil & gas related industries. Demographic changes will make this a good place to locate a geriatric center

6. West Texas: oil & gas, manufacturing, government, and agriculture

7. North West Texas: agriculture, oil & gas, and manufacturing

8. High Plains: agriculture, oil & gas

9. South Texas: government and manufacturing; manufacturing labor intensive; military installations. Future: trade with Mexico, tourism

10. Upper Rio Grande: intensive manufacturing, government

TRENDS AND GENERALIZATIONS

The shrinking petroleum industry has sapped the economic growth in regions most oil-dependent a decade ago.

Manufacturing is a source of regional divergence.

Diversity pays.

To varying degrees, all regions of TX are restructuring their economies.

Some regions have great potential for exports (employment supported by exports) and some are import-sensitive (subject to import competition).

Work force education, technology, and innovation are, and will remain, dominant factors for future economic growth.

Regions of Texas vary widely in

• technical sophistication of work force,
• business diversification,
• capital availability [$$$$$], and
• preparedness for international trade