1. TEXAS ECONOMIC GROWTH TRENDS Office of the Governor – Economic Development & Tourism Key Industries and Regions - 2014

2.  Market Texas as a leading business location  Advertising and business recruitment trips  Assist companies looking for sites or buildings in Texas  Provide business incentives

3. Factors Affecting Growth  Historical drivers of Texas growth expected to drive future growth Climate Natural resources – Oil & gas Business environment Foreign trade – Mexico  Expansion of existing Texas businesses  Attraction of out-of-state businesses

4. Past Decade of U.S. Job Growth New York: 8% California: 5% Florida: 5% Washington: 5% Net New U.S. Jobs by Location, 2003-2013 Texas: 30%

5. Key Growth Industries in Texas  Oil & Gas Extraction  Manufacturing  Fabricated Metal Products  Machinery  Refined Petroleum & Chemicals  Professional Services  IT Services & Data Centers

6. Texas Crude Oil Production, 1981-2013

7. Oil & Gas  Texas rank in US: No. 1  85,000 jobs added in Texas (+44%) since 2010  Job multiplier effect: 2.7  Big share of Texas economy  14% of state GDP in 2012 vs. 7% in 2000  Key: Oilfield Services

8. Oilfield Services – Job Growth by Region (2010-2013)

10. Fabricated Metal Products  Texas rank in US: No. 2  24,500 jobs added in Texas (+22%) since 2010  Job multiplier effect: 2.3  Key: Steel Pipe and Structural Metals  Supplying Oil & Gas industry and others

11. Fabricated Metal Products – Job Growth by Region (2010-2013)

12. Machinery  Texas rank in US: No. 1  16,000 jobs added in Texas (+39%) since 2010  Job multiplier effect: 2.6  Key: Oilfield Machinery

13. Oilfield Machinery – Job Growth by Region (2010-2013)

14. Refined Petroleum & Chemicals  Texas rank in US: No. 1  5,500 jobs added in Texas since 2010  Multiplier effect: 8.5  Refined petroleum exports up 72% since 2010  Billions in new chemical plant investments planned on Texas Gulf Coast

15. Chemicals – Job Growth by Region (2010-2013)

16. Example Manufacturing Expansions in Texas CompanySectorLocationInvestment TenarisSteel PipeHouston/Gulf$1.5 billion VoestalpineSteelCorpus Christi$700 million Borusan MannesmanSteel PipeHouston/Gulf$150 million WeatherfordOil/Gas MachineryHouston/Gulf$100 million National Oilwell VarcoOil/Gas MachineryHouston/GulfNA Mitsubishi Heavy Ind.Oil/Gas MachineryHouston/GulfNA Dow ChemicalChemicalsHouston/Gulf$2.5 billion Exxon MobilChemicalsHouston/Gulf$2.0 billion Ascend PerformanceChemicalsHouston/Gulf$1.3 billion

17. Manufacturing Highlights  Houston region dominating recent growth  More than half of Texas’ new mfg. jobs since 2010  Midland-Odessa industrial base surging  Manufacturing jobs up by one-third since 2010  Manufacturing growth weak in some small metros  Tyler, Temple, Lubbock

18. IT Services and Data Centers  Texas rank in US: No. 2  36,000 jobs added in Texas (+29%) since 2010  Job multiplier effect: 2.0  Key: IT Outsourcing and Software

19. IT Services – Job Growth by Region (2010-2013)

20. Example IT Services Expansions in Texas CompanySectorLocationJobs Apple Electronics/SoftwareAustin3,600 National Instruments Electronics/SoftwareAustin1,000 IBM Electronics/SoftwareAustin900 USAA Corporate ITDallas-Fort Worth680 CompanySectorLocationInvestment Digital Realty Data CentersDallas-Fort Worth$100 million CyrusOne Data CentersDallas-Fort Worth$45 million Stream Data Centers Data CentersHouston/Gulf Coast$35 million

21. Summary IndustryJob Growth (since 2010) Job Multiplier Primary Regions Oil & Gas 44%2.7 Houston, Coastal Bend, Eagle Ford, Permian Basin, North Texas Fabricated Metals 22%2.3 Houston, DFW, East Texas, Permian Basin Oilfield Machinery 39%2.6 Houston, DFW, Permian Basin Refineries & Chemicals 7%8.5 Houston, DFW Beaumont-Port Arthur, Corpus Christi IT Services 29%2.0 Austin, DFW, Houston

22. Eric Clennon Manager of Business Research Economic Development and Tourism Division Office of the Governor eric.clennon@gov.texas.gov