Crossroads of the World
By Bruce Wright
Texas has always meant business — but today, that business extends throughout the world.
What Flows In, What Goes Out
The Texas Governor’s Business and Industry Data Center (BIDC) reports that, in 2006, Texas imported $245.2 billion in goods for businesses and consumers. Energy products, including oil, gas and coal, and power-generating machinery accounted for $75.9 billion or about 31 percent of all imports. Miscellaneous machinery and appliances and telecommunications and other high-tech equipment were our second- and third-most common imports.
According to BIDC, Texas exported goods worth $150.9 billion in 2006. “Nearly 15 percent of Texas’ economic output is related to exports,” said Fiona Sigalla, an economist with the Federal Reserve Bank of Dallas. “That’s nearly twice as big a share as the U.S. [as a whole].” Computers and electronic products led the state’s exports, with $35.2 billion or about 23 percent of the total. Chemical products and machinery were our second- and third-most important exports.
Our closest international neighbor is Texas’ largest trading partner by far.
According to BIDC, Mexico accounted for nearly 51 percent of the state’s imports ($124 billion) and 36 percent of our exports ($54.9 billion) in 2006. Texas exporters, however, have increasingly close ties with the powerhouse economies of East Asia. Our ten biggest export destinations include China, Korea, Taiwan, Singapore and Japan.
Just Passing Through?
Not all of the products exported from Texas were made here, however. “We’re also a powerful distribution hub,” said Sigalla. “Along the border, there’s actually an industry built up around helping shipments get across.”
And that industry has paid off big for the Border economy. “The boom around Laredo and other major road links to Mexico means that U.S. companies are transshipping things to Texas, where they get repackaged and reshipped to Mexico,” said Dr. Bruce Kellison of the University of Texas’ Bureau of Business Research. “They can’t build transshipment points in Laredo fast enough.
“The construction going on there, for warehousing and shipping facilities, is phenomenal,” Kellison said. “Manufactured goods are trucked or rail-shipped to these facilities, offloaded, repackaged and reloaded on to trucks or rail beds and then shipped over the border.”
Dollar Down, Trade Up
Present trends look good for Texas’ exporting businesses. “We’ve seen some declines in the value of the dollar in the last year or so, which makes Texas products more affordable to customers overseas,” Sigalla said. “It’s been statistically shown that the Texas economy benefits when the value of the dollar declines.”
According to Sigalla, international trade is an increasingly important component of the state economy. “It has helped to diversify and stabilize the state economy. Businesses here have learned to capitalize on the global economy and profit from it, and there doesn’t seem to be any sign that that’s going to slow down.”