Category

Strengths (S)

Weaknesses (W)

Opportunities (O)

Threats (T)

Ease of Doing Business

Exceptional Business Climate: Consistently ranked as the Best State for Business for over two decades by CEOs, and has been the top-ranked business climate nationally for three years running (2025). Low Tax Burden: No personal or corporate income tax is a massive incentive for relocation and attracting talent.

Permitting Speed: While overall business-friendly, the speed of permitting and regulatory processes can still be a chokepoint compared to some competitors.

Continued Corporate Relocation: Leveraging the tax and regulatory environment to attract more Fortune 500 companies and tech firms (e.g., Tesla, Meta) to solidify its status as a major corporate HQ hub.

Infrastructure Strain: Rapid, sustained population and business growth put immense pressure on existing utilities, transportation, and public education infrastructure, potentially increasing business costs.

Domestic Manufacturing

Manufacturing Capital of the Nation: Proclaimed the manufacturing capital, leading in high-tech goods, semiconductors, oil/gas, and aerospace. Economic Growth: State GDP expanded at a strong 6.8% annual rate in Q2 2025, significantly outpacing the national rate.

Supply Chain Vulnerability: Manufacturers, particularly those integrated into global value chains (e.g., automotive and electronics), face high transition costs from evolving trade policies.

Reshoring and Nearshoring: Expected to win a massive share of reshoring and nearshoring investment due to its proximity to Mexico and its robust energy/industrial base, driven by new trade deals and geopolitical shifts.

Labor Force Constraints: Slower growth in the labor force, partly due to stricter immigration enforcement and moderating interstate migration, could limit the expansion of the manufacturing base.

Sustainability Initiatives

Clean Energy Production Leader: Already leads the nation in wind energy production and has surpassed California in installed solar capacity. Robust Funding/Programs: Has state programs and access to federal funds (IRA, IIJA) to support energy efficiency and alternative fuels.

Grid Reliability: The state's independent power grid (ERCOT) faces recurring reliability and resiliency issues during extreme weather, which poses a significant risk to industrial and residential consumers.

Hydrogen and Carbon Capture: Opportunities to become a leader in emerging clean energy technologies like hydrogen and carbon capture, utilization, and storage (CCUS), leveraging its extensive oil and gas expertise.

Regulatory Uncertainty: The state legislature and regulatory bodies sometimes introduce bills or policies that create uncertainty for clean energy developers and can slow the transition by favoring traditional energy sources.

Balance of Trade

Export Champion: The No. 1 exporting state for 23 consecutive years, responsible for 21% of all U.S. exports, with a significant trade surplus ($25.9$ billion in H1 2025). Trade Hubs: Home to the Port of Houston (nation's No. 1 exporting metro) and strong border trade infrastructure with Mexico.

Deep Trade Concentration: Trade is heavily concentrated with key partners, especially Mexico (receiving 28% of Texas exports), which increases vulnerability to bilateral policy changes or economic instability.

Energy Export Surge: Long-term trade deals (e.g., energy agreement with the European Union) are set to boost the energy industry and support employment through increased oil and gas exports.

Global Commodity Price Volatility: Despite a strong energy base, lower forecasted oil and gas prices combined with emerging trade barriers could lead to producers scaling back drilling and reducing export volumes.