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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

economy

The Central Texas Region2018 Regional Report

The 20-county Central Texas Region covers about 17,400 square miles in the heart of Texas, stretching from Hillsboro on the north to Interstate 45 on the east to East Yegua Creek on the south to the conjunction of the San Saba and Colorado rivers. The region has a population density of 70 people per square mile, less than the state average density of 108 people per square mile.

The Central Texas Region includes three metropolitan statistical areas (MSAs): the College Station-Bryan MSA comprising Brazos, Burleson and Robertson counties; the Waco MSA comprising Falls and McLennan counties; and the Killeen-Temple MSA comprising Bell, Coryell and Lampasas counties. Counties in the region not associated with an MSA are Bosque, Freestone, Grimes, Hamilton, Hill, Leon, Limestone, Madison, Milam, Mills, San Saba and Washington. The Killeen-Temple MSA’s population is approximately 444,000 (about 37 percent of the region’s total population and 1.5 percent of the state’s). The Waco MSA’s population is approximately 269,000 (about 22 percent of the region’s total population and about 1 percent of the state’s). The population of the College Station-Bryan MSA is approximately 258,000 (about 21 percent of the region’s population and about 1 percent of the state’s).

The region is unique in that it has three economic centers in the cities of Killeen (Bell County), Waco (McLennan County) and College Station (Brazos County).

This report examines regional economic trends including population, personal income, jobs and wages and education, as well as economic conditions and characteristics unique to the Central Texas Region.

Population

The Central Texas Region’s estimated total population in 2017 was 1.2 million, or about 4.6 percent of the state’s total population. This is an increase of about 8 percent (more than 88,000 people) since the 2010 census. An estimated 29 percent of the region’s population is concentrated in Bell County, which is part of the Killeen-Temple MSA.

From 2010 to 2017, the region’s population grew at a slightly slower pace than did the state’s as a whole (Exhibit 1). While the population of each county in the region changed during this period, Brazos outpaced all others, growing by more than 14 percent – above the state’s 12.6 percent growth rate.

Exhibit 1: Central Texas Region Population by County,
2010 and 2017
County 2010 Census Estimate (as of July 2017) Percent Change
Bell 310,235 347,833 12.1%
Bosque 18,212 18,326 0.6%
Brazos 194,851 222,830 14.4%
Burleson 17,187 18,011 4.8%
Coryell 75,388 74,913 -0.6%
Falls 17,866 17,437 -2.4%
Freestone 19,816 19,625 -1.0%
Grimes 26,604 28,082 5.6%
Hamilton 8,517 8,422 -1.1%
Hill 35,089 35,852 2.2%
Lampasas 19,677 21,027 6.9%
Leon 16,801 17,243 2.6%
Limestone 23,384 23,527 0.6%
Madison 13,664 14,222 4.1%
McLennan 234,906 251,259 7.0%
Milam 24,757 25,053 1.2%
Mills 4,936 4,921 -0.3%
Robertson 16,622 17,203 3.5%
San Saba 6,131 5,959 -2.8%
Washington 33,718 35,043 3.9%
Central Texas Region Total 1,118,361 1,206,788 7.9%
College Station-Bryan MSA 228,660 258,044 12.9%
Killeen-Temple MSA 405,300 443,773 9.5%
Waco MSA 252,772 268,696 6.3%
Texas Total 25,145,561 28,304,596 12.6%

Source: U.S. Census Bureau


Population Composition

According to a recent Census analysis, the median age of the residents of the Central Texas Region’s counties is on par with the state as a whole. Three of the region’s 20 counties have a median age significantly younger than the state median age of 34.2 years. These three – Bell (30.4 years), Brazos (25.5 years) and Coryell (31 years), combined with McLennan (33 years) – make up a majority of the region’s population. In fact, Brazos County has one of the youngest populations in the state. The College Station-Bryan and Killeen-Temple MSAs both had median ages significantly lower than the state. The Waco MSA has a median age similar to the statewide median.

Household income in Texas is more or less evenly distributed among five income levels. Of the more than 9 million households in the state, 22 percent have incomes less than $25,000, and 16 percent have incomes exceeding $125,000. In every region of the state, nearly 18 percent of households have an average income between $50,000 and $75,000.

Household income in the Central Texas Region is lower than the state average; only 29.2 percent of the region’s household incomes are greater than $75,000, versus 36.3 percent for Texas as a whole (Exhibit 2). This disparity may be attributable to the younger median age of residents in three of the region’s four most populous counties.

Approximately 57 percent of the Central Texas Region’s total population is white (not Hispanic) – 14 percentage points higher than non-Hispanic whites’ 43.4 percent share of the state population (Exhibit 3).

Exhibit 2: Central Texas Region and Texas Household Income

Exhibit 2: Household Income Percentile, Central Texas Region vs. Texas
Income Level Central Texas Region State Total
less than $25,000 26.7% 22.2%
$25,000 to $50,000 26.0% 23.6%
$50,000 to $75,000 18.2% 17.8%
$75,000 to $125,000 18.8% 20.2%
more than $125,000 10.4% 16.1%

Source: U.S. Census Bureau

Exhibit 3: Central Texas Region and Texas Population by Race and Ethnicity

Population by Race and Ethnicity, Central Texas Region vs. Texas
Race and Ethnicity Central Texas Region State Total
Hispanic 22.6% 38.6%
Black (not Hispanic) 14.6% 11.6%
White (not hispanic) 57.2% 43.4%
Other 5.5% 6.3%

Source: U.S. Census Bureau


Jobs and Wages

In 2017, the Central Texas Region accounted for 3.6 percent of the state’s total employment. The region’s employment totals increased by 13 percent from 2007 to 2017, slightly lower than the state job growth rate. During the same period, employment in the College Station-Bryan MSA increased more than 22 percent; about 19 percent in the Killen-Temple MSA and about 8 percent in the Waco MSA (Exhibit 4). More than 32 percent of the region’s jobs are located within the Killen-Temple MSA. The Waco MSA accounts for 26.6 percent; the College Station-Bryan MSA more than 25 percent.

Exhibit 4: Central Texas Region Employment, 2007 to 2017
Area Number of Jobs, 2017 Change in Jobs from 2007 Percent Change
College Station-Bryan MSA 110,084 19,893 22.1%
Killeen-Temple MSA 139,815 22,214 18.9%
Waco MSA 115,763 8,643 8.1%
Central Texas Region 435,805 50,666 13.2%
Texas 12,011,078 1,779,177 17.4%
United States 143,860,846 8,495,037 6.3%

Note: The above figures include private and public sector employees with the exception of active duty military personnel, railroad employees, religious institution employees and the self-employed.

Sources: JobsEQ and Bureau of Labor Statistics


In 2017, the average wage in the Central Texas Region was $43,046, well below the state and national averages. However, from 2007 to 2017, individual wage growth in the region was nearly double both the state and national rates (Exhibit 5).

Adjusted for inflation, individual wages in the Central Texas Region increased 10 percent during the 10-year period. Within the region, the Killeen-Temple MSA led the way with an average wage higher than the regional average and a growth rate significantly higher than the region and state in 2007 through 2017.

Exhibit 5: Central Texas Region Wage Trends, 2007 to 2017
Area Average Wage, 2017 Change in Wages from 2007 Nominal Rate of Change, 2007 to 2017 Real Rate of Change,* 2007 to 2017
College Station-Bryan MSA $40,722 $8,092 24.8% 5.6%
Killeen-Temple MSA $45,037 $12,122 36.8% 15.7%
Waco MSA $44,341 $9,875 28.7% 8.8%
Central Texas Region $43,046 $9,958 30.1% 10.0%
Texas $55,801 $11,106 24.9% 5.6%
United States $55,375 $10,917 24.6% 5.4%

* The constant or “real” rate adjusts average wages for the effects of inflation in the value of a particular base year. According to the Bureau of Labor Statistics, prices in 2017 are 18.22 percent higher than prices in 2007.

Sources: JobsEQ and Bureau of Labor Statistics


Industry Concentration

Exhibit 6 lists the Central Texas Region industry subsectors most highly concentrated according to location quotient (LQ) — a measure of how concentrated an industry is in the region relative to the nation — and by share of total state jobs in each subsector. Industries are described according to the federal government’s North American Industry Classification System (NAICS), which is used by federal statistical agencies to classify business establishments.

There is a wide variety of industries represented in the Central Texas Region’s most highly concentrated industries list. While there are eight distinct industry subsectors represented, the educational and public service subsectors stand out. This is due in part to the major universities located in the region as well as Fort Hood. Total employment in the educational services subsector increased by 15 percent from 2007 to 2017, with a solid increase in individual wages during the same period.

Exhibit 6: Central Texas Region’s Most Highly Concentrated Industries, 2007 to 2017
Industry Description (NAICS1) Job Concentration Job Trends Wage Trends
Location Quotient2 Share of State's Jobs Number of Jobs Change, 2007 to 2017 Average Wage Nominal Rate3 of Change Real Rate3 of Change, 2007 to 2017
Lessors of Nonfinancial Intangible Assets (except copyrighted works) (533) 5.30 17.2% 395 1.8% $78,302 16.2% -1.7%
Animal Production and Aquaculture (112) 2.54 8.2% 2,082 25.7% $40,361 41.8% 20.0%
Support Activities for Mining (213) 2.21 1.5% 2,033 -2.0% $71,713 22.3% 3.4%
Mining (except oil and gas) (212) 2.06 10.2% 1,181 -21.7% $64,301 41.2% 19.4%
Heavy and Civil Engineering Construction (237) 2.01 4.1% 7,228 1.7% $49,705 39.6% 18.1%
Pipeline Transportation (486) 1.95 1.6% 306 16.4% $104,431 18.1% -0.1%
Justice, Public Order and Safety Activities (922) 1.85 4.9% 10,902 4.1% $49,550 28.9% 9.0%
Educational Services (611) 1.85 6.1% 72,199 15.0% $42,184 28.7% 8.8%
Furniture and Related Product Manufacturing (337) 1.84 9.7% 2,252 -16.0% $39,766 11.5% -5.7%
Paper Manufacturing (322) 1.75 11.5% 2,005 19.2% $50,562 23.2% 4.2%
Central Texas Region 3.6% 435,805 13.2% $43,046 30.1% 10.0%

Note: The figures above include private and public sector employees with the exception of active duty military personnel, railroad employees, religious institution employees and the self-employed.

  1. NAICS codes are the standard used by federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the U.S. business economy.
  2. The higher the location quotient, the more concentrated the industry subsector is in the region compared to nation.
  3. The constant or “real” rate adjusts average wages for the effects of inflation in the value of a particular base year. According to the Bureau of Labor Statistics, prices in 2017 were 18.22 percent higher than prices in 2007.

Sources: JobsEQ and Bureau of Labor Statistics


Education

A strong educational foundation is the cornerstone for growth and competitiveness in the global economy. As the Texas economy diversifies, becoming more knowledge based, a well-educated workforce offers possibilities for workplace advancement and prospects for business expansion.

In 2016, 85.6 percent of the Central Texas Region’s class of public high school students graduated, lower than the state rate of 89.1 percent (Exhibit 7). The region’s high school graduation rate has decreased about 1 percent since 2010, dropping it below the state rate and subsequently decreasing over the past few years.

Exhibit 7: Central Texas Region and Texas Public High School Graduation Rates, 2010 to 2016
Year Central Texas Region Texas
2010 86.5% 84.3%
2011 87.8% 85.9%
2012 89.8% 87.7%
2013 88.8% 88.0%
2014 88.6% 88.3%
2015 87.7% 89.0%
2016 85.6% 89.1%

Source: Texas Education Agency


Many high school graduates enroll in postsecondary programs, offering greater job prospects and the possibility to of earning higher wages. Residents of the Central Texas Region enjoy a variety of options for higher educational achievement (Exhibit 8).

Exhibit 8: Central Texas Region Institutions of Higher Education, 2017

Universities

  • Baylor University
  • Texas A&M University
  • Texas A&M University – Central Texas
  • University of Mary Hardin-Baylor

Junior and Community Colleges

  • Blinn College District
  • Central Texas College
  • McLennan Community College
  • Temple College
  • Texas State Technical College System
  • Texas State Technical College – Waco

Health Science Schools

  • Texas A&M Health Science Center

Source: Texas Higher Education Coordinating Board

Regional Economy

The Comptroller's office has analyzed data pertaining to the Central Texas Region, examining the region’s dynamics and competitiveness.

Sales Tax Revenue

Sales receipts subject to state sales tax directly attributable to the Central Texas Region trended upward in the past decade (trend lines depict trends in data, either upward, downward or flat, for an extended period of time). The region has demonstrated a slow and steady increase following the 2009 recession, with receipts from 2017 indicating a potential acceleration in the upward trajectory (Exhibit 9).

For 2017, receipts subject to state sales tax directly attributed to businesses in the Central Texas Region totaled $11.8 billion, contributing about 2.4 percent to the state’s overall sales tax revenue collections. The Waco MSA directly accounted for $2.9 billion of this total, with the Killeen-Temple and College Station-Bryan MSAs contributing $3.6 billion and $3.4 billion, respectively.

A review of two-digit NAICS codes allows for a broad analysis of industry sectors within the region. The retail trade and food services and accommodation sectors contribute most to taxable sales, with the two combining for more than 70 percent of the region’s state sales tax collections. Another industry of note is the wholesale trade sector, accounting for 8 percent of the region’s reported sales tax revenues.

Exhibit 9: Revenue Subject to Sales Tax, 2007 to 2017
Year Central Texas Region
2007 $8,434,453,199
2008 $8,854,932,724
2009 $8,299,606,602
2010 $8,470,853,653
2011 $8,649,940,393
2012 $9,329,117,482
2013 $9,768,284,216
2014 $10,496,600,193
2015 $10,747,187,652
2016 $11,068,430,975
2017 $11,777,704,697

Note: Numbers shown are for reported revenue subject to sales tax and directly attributed to the region.

Source: Texas Comptroller of Public Accounts


U.S. Military Installation Impact

Texas has 13 U.S. military installations within its borders. In 2017, these bases directly employed more than 224,000 and supported nearly 625,000 jobs. The U.S. military installations in Texas contributed about $62.3 billion to the state’s gross domestic product (GDP).

Military installations in the Central Texas Region have a positive impact on the Texas economy, supporting an estimated 150,000 jobs and contributing about $15.1 billion to the state’s GDP (Exhibit 10).

Exhibit 10: Estimated U.S. Military Impact on the Central Texas Region, 2017
Region Total Jobs Supported U.S. Military Contribution to State GDP
State of Texas 624,690 $62.3 billion
Central Texas Region 150,155 $15.1 billion

Sources: Texas Comptroller of Public Accounts, TMPC, REMI


Central Texas Region vs. the U.S.

Based on data from the World Bank and the U.S. Bureau of Economic Analysis, if Texas were a nation, it would rank as the world’s 10th largest economy in terms of GDP.

Exhibit 11 shows how the Central Texas Region ranks with other states and the nation on a number of demographic and economic measures. Were it a separate state, the region would be the 42nd largest in the union in terms of land mass (square miles) and have the 43rd largest population. The region also would have the 22nd lowest unemployment rate for 2017.

Exhibit 11: Central Texas Region Compared to the U.S.
Measure Central Texas Region Rank if Region
was a State
Texas State Rank U.S.
Population 1,206,788 43 28,304,596 2 325,719,178
Age 25+ with at least a High School Diploma 85.3% 43 82.4% 49 87.0%
Age 25+ with Bachelor's Degree or Higher 23.0% 47 28.1% 29 30.3%
Population Under 18 Years 24.3% 9 26.0% 2 22.6%
Population 65 Years and Over 13.4% 48 12.3% 48 15.7%
Age Dependency Ratio* 60.5% 14 62.1% 20 61.9%
Per Capita Income $38,197 49 $46,204 25 $49,204
Unemployment Rate 4.0% 22 4.3% 26 4.4%

* The age dependency ratio is the share of dependent-age persons compared to the working-age population minus the sum of those under 18 years and 65 and older divided by the population age 18 to 64. In other words, for every 100 working-age people in Texas there are about 62 dependent-age people.

Sources: U.S. Census Bureau, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis


Conclusion

The Central Texas Region is a microcosm of the state – both urban and rural with a vibrant and diverse economy. This region is unique in that it has three distinct economic centers: the Waco, Killeen-Temple and College Station-Bryan MSAs.

As this report notes, the Central Texas Region and its 20 counties have many unique economic variables and challenges. The region has had reasonable population growth across the board since 2010, and its median age is significantly younger than Texas as a whole. The region’s employment growth rate is slightly below the state’s, but its wage growth is almost double that of the state (Killeen-Temple MSA leads the way regionally).

The U.S. Army at Fort Hood has had a meaningful impact on the Central Texas Region’s local economies. Additionally, 2017 receipts subject to state sales tax indicate an acceleration in the region’s slow and steady rise after the 2009 recession. The eight distinct industry subsectors represented in the region’s most highly concentrated industries list attest to the region’s diverse economy.


Questions?

If you have any questions or concerns regarding the material on this page, please contact the Comptroller's Data Analysis and Transparency Division.

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