Economy of Texas

The economy of the State of Texas is the second largest by GDP in the United States after that of California. It has a gross state product of $2.769 trillion as of 2024. In 2024, Texas had the most Fortune 500 companies of any state with 53 in total. As of 2023, Texas grossed more than $440 billion a year in exports, more than double the next highest state California ($178 billion).

Texas would be ranked as the 8th largest economy among nations of the world by nominal GDP, ahead of Canada, South Korea, Russia, and Australia.

In 2024, Texas had a median household income of $79,721. As of 2024 Texas had $73,032,946,298 in total outstanding state debt, including both general obligation of $16,611,730,000 and revenue debt of $56,421,216,298. With $8,348,956,000 of total debt issued including $1,235,430,000 general obligation and $7,113,526,000 Revenue supported. Texas has the second largest population in the country after California as of 2025.

Historically four major business enterprises shaped the Texas economy prior to World War II: cattle and bison, cotton, timber, and oil. The first enterprise to enjoy major success in Texas was cattle and bison. In the early days of Anglo-American settlement, furs and hides were the major products derived from cattle. Beef was not particularly popular in the United States. However, Texas entrepreneurs soon pioneered the beef industry, and demand steadily increased. The cattle industry enjoyed its greatest financial success in the later 1870s and 1880s.

Cotton production, which had been known in Texas since Spanish times, gradually increased throughout the 19th century. By the early 20th century, Texas had become the leading cotton producer in the nation. By the 1920s, the cotton industry was past its peak, as government regulation and foreign competition took their toll.

The forests of Texas have been an important resource since its earliest days and have played an important role in the state's history. The vast woodlands of the region, home to many varieties of wildlife when Europeans first arrived, provided major economic opportunities for early settlers. They today continue to play an important role economically and environmentally in the state.

The densest forest lands lie in the eastern part of the state. In particular the Big Thicket region, just north of Houston and Beaumont, has historically been home to the most dense woodlands. The Big Thicket was mostly uninhabited until heavy settlement from the U.S. began in the mid-19th century, and was even used as a refuge by runaway slaves and other fugitives. The Rio Grande valley in South Texas was home to a large palm tree forest when Spaniards first arrived, though today very little of it remains.

The development of railroads in the eastern part of the state during the mid-19th century led to a boom in lumber production in the 1880s. This era of financial success lasted approximately 50 years finally coming to an end as Texas's forests were decimated and the Great Depression dropped prices.