Texas #1 in Fortune 500s, Houston gainsThe new 2008 Fortune 500 list is out, and Houston and Texas continue to be big winners. As I predicted last year, Texas passed up New York to be the number one state in the nation for F500 headquarters, with 58 to 55 for NY and 52 for CA. Just 3 years ago, Texas was third behind both CA and NY, with only 48, but has added an impressive 10 more since then. The future growth looks good for Texas too, with 11 companies ranked between 500 and 600 poised to move up (although most are around DFW).
Houston has also been a steady gainer, from 20 in 2005 to 22 in 2007 to 25 today. We're still #2 to NYC, but they dropped from 45 to 43, so we gained a net +5 in one year - a pretty big move. Most of the Wall Street turmoil has been in the last few months, which won't show up hitting NYC until next year's list. Dallas (12), Chicago (12), and Atlanta (9 - a hard fall from 14 in 2005) are the next ones on the list, so we're well ahead at the #2 spot. Of course, that's city data, not metro. We only pick up one more to 26 in the metro count (Anadarko in The Woodlands), but Chicago and possibly the SF Bay Area would match or exceed us on a metro basis (technically, the Census considers SF and San Jose separate metros, but most people would admit that doesn't really make any more sense than splitting Dallas and Ft. Worth).
We also moved ahead of the DFW metro:
- Houston 26
- Dallas/FW 23
- San Antonio 5 (although 2 of those are mega-big Fortune 20, AT&T and Valero)
- Austin 2
- Other TX 2
Here's the AP story, focused on Texas as the new #1, with some interesting exerpts:
I hear people knock Texas and Houston for being "too cheap," but people forget how powerful that affordability - housing, cost of living, taxes, etc. - is for growth.
Business experts say it's a matter of simple economics — Texas attracts companies with its low taxes, affordable land and large labor force.
"Cost is overwhelmingly the No. 1 driver," said Albert W. Niemi Jr., dean of the business school at Southern Methodist University, who wrote his doctoral thesis about companies leaving the Northeast for the Sun Belt 30 years ago.
Texas has been attracting big companies from out of state for nearly three decades, including American Airlines in 1979. Exxon — before it bought Mobil — and J.C. Penney Co. arrived in the following decade. All three came from New York.
In recent years, Fortune 500 companies such as Tenet Healthcare Corp. and — just last year — engineering and construction company Fluor Corp. moved in from California.
The reverse Gold Rush from California to Texas has concerned West Coast officials for years. In 2004, consultant Bain & Co. surveyed big companies for a California business group and found that half planned to shift jobs out of state or at least stop expanding in California because of high costs, including taxes. Of that group, 27 percent said they would go to Texas, more than any other state.
Lyssa Jenkens, chief economist for the Greater Dallas Chamber of Commerce, said there is a snowball effect — once a few big companies move in, others follow.
"If you move to Dallas-Fort Worth or Houston, you're in the company of other large companies," she said. "They like to be near each other because there are all kinds of services for corporate headquarters — law, accounting, engineering, (information technology) services."
Thanks to Brian for the heads up and stats.