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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 South Texas Region2018 Regional Report

The 28-county South Texas Region covers about 37,800 square miles in southernmost Texas, stretching along the Mexican border from Del Rio to Brownsville and up the Gulf Coast past Rockport to Aransas Pass and San Antonio Bay. The region has a population density of 68 people per square mile, less than the state average of 108 people.

The South Texas Region includes four metropolitan statistical areas (MSAs): the Brownsville-Harlingen MSA, which is composed of Cameron County; the Corpus Christi MSA, which includes the counties of Aransas, Nueces and San Patricio; the Laredo MSA, which is composed of Webb County; and the McAllen-Edinburg-Mission MSA, which is composed of Hidalgo County. Counties in the region not associated with an MSA are Bee, Brooks, Dimmit, Duval, Edwards, Jim Hogg, Jim Wells, Kenedy, Kinney, Kleberg, La Salle, Live Oak, Maverick, McMullen, Real, Refugio, Starr, Uvalde, Val Verde, Willacy, Zapata and Zavala.

The South Texas Region is unique in its makeup, with both coastal and border characteristics. This distinctiveness gives it two economic core areas in the cities of Laredo (Webb County) and Corpus Christi (Nueces County). The Laredo MSA has a population of about 275,000 (about 11 percent of the region and 1 percent of the state), and the Corpus Christi MSA has a population of about 454,000 (about 19 percent of the region and 2 percent of the state).

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

Population

The South Texas Region’s estimated total population in 2017 was more than 2.4 million, or nearly 9 percent of the state’s total population. This is an increase of 7 percent (more than 163,000 people) since the 2010 census. An estimated 35 percent of the region’s population is concentrated in Hidalgo County (which contains the city of McAllen).

From 2010 to 2017, the region’s population grew slightly slower than the state as a whole (Exhibit 1). While the population of each county in the region experienced positive and negative change during this period, Hidalgo outpaced all others by growing by more than 11 percent – slightly lower than the state as a whole.

Exhibit 1: South Texas Region Population by County,
2010 and 2017
County 2010 Census Estimate (as of July 2017) Percent Change
Aransas 23,158 25,572 10.4%
Bee 31,861 32,563 2.2%
Brooks 7,223 7,235 0.2%
Cameron 406,220 423,725 4.3%
Dimmit 9,996 10,418 4.2%
Duval 11,782 11,273 -4.3%
Edwards 2,002 1,953 -2.4%
Hidalgo 774,769 860,661 11.1%
Jim Hogg 5,300 5,202 -1.8%
Jim Wells 40,838 40,871 0.1%
Kenedy 416 417 0.2%
Kinney 3,598 3,745 4.1%
Kleberg 32,061 31,088 -3.0%
La Salle 6,886 7,584 10.1%
Live Oak 11,531 12,174 5.6%
Maverick 54,258 58,216 7.3%
McMullen 707 778 10.0%
Nueces 340,223 361,221 6.2%
Real 3,309 3,429 3.6%
Refugio 7,383 7,224 -2.2%
San Patricio 64,804 67,215 3.7%
Starr 60,968 64,454 5.7%
Uvalde 26,405 27,132 2.8%
Val Verde 48,879 49,205 0.7%
Webb 250,304 274,794 9.8%
Willacy 22,134 21,584 -2.5%
Zapata 14,018 14,322 2.2%
Zavala 11,677 11,948 2.3%
South Texas Region Total 2,272,710 2,436,003 7.2%
Laredo MSA 250,304 274,794 9.8%
Corpus Christi MSA 428,185 454,008 6.0%
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 for the South Texas Region’s counties is significantly lower than that of the state as a whole. Eleven of the region’s 28 counties have a median age significantly lower than the state’s median age of 34.2 years, with Hidalgo (28.8 years), Kleberg (28 years), Maverick (29.7 years), Starr (28.7 years), Webb (28.3 years) and Zapata (29.3 years) being six of the counties with the youngest average populations in the state. However, the region also has two of the counties with the oldest populations by median age in the state: Aransas (50.7 years) and Real (55.5 years). The Corpus Christi MSA has a median age on par with that of the state. The Laredo MSA has a median age significantly younger than that of the state.

Household income in Texas is more or less evenly distributed among five income levels. Of the more than 9 million households within the state of Texas, 22 percent have incomes less than $25,000 and 16 percent have incomes more than $125,000. In every region in the state, nearly 18 percent have an average household income between $50,000 and $75,000. Household income within the South Texas Region is significantly lower than that of the state, with 59.1 percent of households in the region having incomes less than $50,000 and 33.8 percent with incomes less than $25,000 (Exhibit 2). Only 8.5 percent of households have incomes more than $125,000.

Almost 84 percent of the South Texas Region’s total population is Hispanic – more than double the state’s Hispanic population proportion (Exhibit 3). This region has the highest concentration of Hispanics in the state and the lowest concentration of the black (not Hispanic) population, at slightly more than 1 percent.

Exhibit 2: South Texas Region and Texas Household Income

Exhibit 2: Household Income Percentile, South Texas Region vs. Texas
Income Level South Texas Region State Total
less than $25,000 33.8% 22.2%
$25,000 to $50,000 25.3% 23.6%
$50,000 to $75,000 16.6% 17.8%
$75,000 to $125,000 15.8% 20.2%
more than $125,000 8.5% 16.1%

Source: U.S. Census Bureau

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

Population by Race and Ethnicity, South Texas Region vs. Texas
Race and Ethnicity South Texas Region State Total
Hispanic 83.8% 38.6%
Black (not Hispanic) 1.1% 11.6%
White (not Hispanic) 13.7% 43.4%
Other 1.4% 6.3%

Source: U.S. Census Bureau


Jobs and Wages

In 2017, the South Texas Region accounted for nearly 7 percent of the state’s total employment. The region’s employment increased by more than 12 percent from 2007 to 2017 – slower than the employment growth for the state at 17.4 percent. Employment in the Laredo MSA increased by 13.5 percent over the same period, with the Corpus Christi MSA increasing by about 7 percent (Exhibit 4). More than 23 percent of the region’s total jobs are in the Corpus Christi MSA.

Exhibit 4: South Texas Region Employment, 2007 to 2017
Area Number of Jobs, 2017 Change in Jobs from 2007 Percent Change
Laredo MSA 99,822 11,856 13.5%
Corpus Christi MSA 187,178 11,906 6.8%
South Texas Region 813,281 89,570 12.4%
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


The average wage in the South Texas Region was $37,315 in 2017, well below the average wage of the state and nation; however, from 2007 to 2017, individual wage growth in the region was on par with individual wage growth at the state and national levels during the same period (Exhibit 5).

Adjusted for inflation, individual wages in the South Texas Region increased 4 percent during this period. Within the region, the Corpus Christi MSA had average wage growth of 5.5 percent from 2007 to 2017, and the Laredo MSA had average wage growth of about 3 percent.

Exhibit 5: South 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
Laredo MSA $35,376 $6,367 21.9% 3.2%
Corpus Christi MSA $46,392 $9,206 24.8% 5.5%
South Texas Region $37,315 $6,961 22.9% 4.0%
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 South 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.

The South Texas Region’s most highly concentrated industries primarily concern public health, safety and education and the extraction and transportation of natural resources. Of the top 16 subsectors, four industries (justice, public order and safety activities, ambulatory health care services, educational services and social assistance) account for 35 percent of the workforce. The region’s seventh most highly concentrated industry subsector – justice, public order and safety activities – has seen solid employment growth with individual real wages growing by more than 18 percent from 2007 to 2017.

Exhibit 6: South 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
Support Activities for Mining (213) 7.77 10.0% 13,298 2.3% $79,792 26.7% 7.2%
Leather and Allied Product Manufacturing (316) 7.23 27.7% 1,182 -24.9% $23,753 2.1% -13.7%
Petroleum and Coal Products Manufacturing (324) 4.70 13.3% 3,083 10.6% $125,160 18.4% 0.1%
Fishing, Hunting and Trapping (114) 3.72 31.9% 179 44.2% $31,091 11.0% -6.1%
Pipeline Transportation (486) 3.34 5.1% 975 84.9% $98,065 59.5% 34.9%
Support Activities for Transportation (488) 2.73 13.0% 12,058 0.2% $40,740 22.7% 3.8%
Justice, Public Order and Safety Activities (922) 2.64 13.0% 28,974 15.2% $72,668 39.8% 18.3%
Ambulatory Health Care Services (621) 2.39 14.0% 102,895 31.0% $27,623 16.2% -1.7%
Rail Transportation (482) 2.34 17.8% 13 617.8% $28,259 32.5% 12.1%
Oil and Gas Extraction (211) 2.21 2.4% 1,845 -9.2% $103,294 11.7% -5.5%
South Texas Region - 6.8% 813,281 12.4% $37,315 22.9% 4.0%

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, 89.1 percent of the South Texas Region’s class of public high school students graduated, matching the state’s rate (Exhibit 7). The region’s high school graduation rate has increased 7 percent since 2010 and has gone from underperforming to matching the state.

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

Exhibit 7: South Texas Region and Texas Public High School Graduation Rates, 2010 to 2016
Year South Texas Texas
2010 82.1% 84.3%
2011 83.8% 85.9%
2012 86.0% 87.7%
2013 86.8% 88.0%
2014 86.8% 88.3%
2015 87.9% 89.0%
2016 89.1% 89.1%

Source: Texas Education Agency


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

Universities

  • Sul Ross State University Rio Grande College
  • Texas A&M International University
  • Texas A&M University
    • at Galveston
    • Corpus Christi
    • Kingsville
  • The University of Texas Rio Grande Valley

Junior and Community Colleges

  • Coastal Bend College
  • Del Mar College
  • Laredo College
  • South Texas College
  • Southwest Texas Junior College
  • Texas Southmost College
  • Texas State Technical College-Harlingen

Health Science Schools

  • The University of Texas Rio Grande Valley-Medical School

Source: Texas Higher Education Coordinating Board

Regional Economy

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

Sales Tax Revenue

Receipts subject to state sales tax directly attributed to the South 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 had a steady climb following the 2009 recession up through the region’s peak in 2014. While there was a period of downward receipts, 2017 indicates that an upward climb may have resumed (Exhibit 9). For 2017, receipts subject to state sales tax directly attributed to businesses in the South Texas Region exceeded $20.4 billion, contributing about 4.2 percent to the state’s overall sales tax revenue collections. The Laredo MSA directly accounted for $2.5 billion of this total, and the Corpus Christi MSA accounted for $5.7 billion.

A review of two-digit NAICS codes allows for a broad analysis of industry sectors within the region. The retail trade and the food services and accommodation sectors contribute most to taxable sales, with the two combining for more than 80 percent of the region’s state sales tax contributions. Another industry of note is the wholesale trade sector, combining for 4 percent of the region’s reported sales tax contributions.

Exhibit 9: Revenue Subject to Sales Tax, 2007 to 2017
Year South Texas Region
2007 $16,946,451,548
2008 $17,718,134,215
2009 $15,811,915,499
2010 $16,724,239,215
2011 $18,685,732,470
2012 $20,343,758,973
2013 $21,152,881,162
2014 $21,965,955,965
2015 $21,347,473,720
2016 $20,074,702,140
2017 $20,430,951,520

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).

U.S. military installations within the South Texas Region have a positive impact on the Texas economy, supporting an estimated 46,553 jobs and contributing about $4.3 billion to the state’s GDP (Exhibit 10).

Exhibit 10: Estimated U.S. Military Impact on the South Texas Region, 2017
Region Total Jobs Supported U.S. Military Contribution to State GDP
State of Texas 624,690 $62.3 billion
South Texas Region 46,553 $4.3 billion

Sources: Texas Comptroller of Public Accounts, TMPC, REMI


South 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 region rates with other states and the nation on a number of demographic and economic measures. The region would be the 38th largest state in terms of land mass (square miles) and have the 36th largest population.

Exhibit 11: South Texas Region Compared to the U.S.
Measure South Texas Region Rank if Region
was a State
Texas State Rank U.S.
Population 2,436,003 36 28,304,596 2 325,719,178
Population Age 25+ with at least a High School Diploma 68.0% 51 82.4% 49 87.0%
Population Age 25+ with Bachelor’s Degree or Higher 16.9% 51 28.1% 29 30.3%
Population Under 18 Years 30.3% 1 26.0% 2 22.6%
Population 65 Years and Over 12.4% 48 12.3% 48 15.7%
Age Dependency Ratio* 74.4% 51 62.1% 20 61.9%
Per Capita Income $29,998 51 $46,204 25 $49,204
Unemployment Rate 6.6% 50 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 South Texas Region is a microcosm of the state; it is both urban and rural, with a vibrant and diverse economy. Webb County, with the city of Laredo at its center, and Nueces County, with the city of Corpus Christi at its heart, are the economic focal points of the region.

As this report notes, the South Texas Region and its 28 counties have many economic variables and challenges that are unique. The median age of this region is significantly lower than that of Texas, and it contains six of the counties with the youngest average populations in the state. If this region were a state, it would have the youngest population in the nation.

While the region has the largest concentration of Hispanics, it is also the least diverse. Household income is significantly lower than the state’s with 59 percent of households having an income below $50,000. The high school graduation rate in the region has increased 7 percent since 2010 mirroring the state’s rate.

The region has a high concentration of public health, safety and education industries. Of the 16 most concentrated industry subsectors, 35 percent of the region’s workforce is employed within four (justice, public order and safety activities, ambulatory health care services, educational services and social assistance), differentiating the South Texas Region from other regions.


Questions?

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