Texas stands as the second-largest state economy in the United States, with a gross domestic product surpassing $2.7 trillion in 2024 and a labor force of more than 15 million people.
The state’s reach extends well beyond its borders through energy production, advanced manufacturing, and international trade. While certain sectors expand rapidly, others provide stability by supplying consistent employment and income.
From globally influential oil fields to fast-growing corporate service hubs, the following industries form the foundation of Texas’ economic strength.
1. Trade, Transportation, and Utilities
The trade, transportation, and utilities “supersector” accounts for roughly one-fifth of all nonfarm employment in Texas, according to the Bureau of Labor Statistics. It brings together wholesale merchants, retail stores, freight carriers, and utility providers into a single employment giant.
This network keeps goods, fuel, and essential services flowing across the state and far into national and international markets, with distribution hubs in Dallas–Fort Worth and Houston playing pivotal roles.
Not every area of commerce feeds into economic growth, however. Industries restricted by state law, such as online casinos, remain absent from Texas’ GDP drivers.
2. Energy and Petroleum
Few industries define Texas more clearly than energy. Oil and natural gas production dominate, alongside a growing commitment to renewables such as wind power. The energy sector’s GDP contribution comes largely from mining, quarrying, and oil and gas extraction, which reached over $190 billion in recent BEA reports.
Beyond extraction, processing, and refining link this sector to many others.
According to the Texas State Profile and Energy Estimate, in 2023, Texas produced 43 percent of U.S. crude oil and 27 percent of natural gas gross withdrawals.
The state operated 34 refineries that could process nearly 6.3 million barrels per day, which is about one-third of national capacity, and led wind-powered electricity generation with 28 percent of the U.S. total in the respective year.
3. Professional and Business Services
Professional and business services deliver a large share of value-added activity in Texas, employing more than 1.9 million people. The sector ranges from legal and accounting firms to engineering consultancies and IT service providers.
It benefits from a steady influx of corporate relocations, as companies seek Texas’ lower operating costs and favorable tax structure.
Relocations from California, New York, and other high-cost states have expanded demand for specialized business support, from architectural design to systems integration.
The clustering of talent and expertise in metro areas like Austin and Dallas–Fort Worth strengthens Texas’ ability to attract headquarters operations, which in turn drives leasing, staffing, and technology procurement.
4. Manufacturing
Manufacturing in Texas encompasses petrochemicals, electronics, aerospace components, food processing, and industrial machinery. The sector’s diversity helps offset fluctuations in any one product category. Cities like Houston lead in petrochemical output, while Austin is known for semiconductor fabrication.
Texas’ manufacturing strength is reinforced by its position as a leader in trade, with exports exceeding $444.6 billion in 2023 and accounting for nearly 22 percent of all U.S. exports.
This large share is driven by petrochemicals, electronics, and machinery. Investments in new plants and technology upgrades signal confidence that this sector will remain competitive globally, with export partners including Mexico, Canada, and multiple Pacific Rim nations.
5. Financial Activities
Texas has become a stronghold for banking, insurance, and investment management, with the Dallas–Fort Worth metroplex and Houston serving as primary hubs.
Financial services contribute around 6 percent of the state’s GDP, providing high-value jobs and capital access to both consumers and businesses.
According to Dallas Fed Economic Indicators for Texas, employment climbed 4.6 percent in April 2025 – adding 54,000 jobs – with professional and business services among the few sectors showing double-digit gains, while average hourly earnings rose 4.9 percent.
A growing population and steady inflow of corporate headquarters create strong demand for real estate financing, commercial lending, and wealth management services, all of which feed back into the state’s broader economic expansion
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