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Ray Perryman: Service-oriented economy thriving in Texas | Columnists

Mount Equity Group Tokyo Japan > News > Markets > Ray Perryman: Service-oriented economy thriving in Texas | Columnists

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.

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