Can Texas Overtake California As Largest U.S. Economy?

Experts point to shifting global supply chains in Mexico, an uptick in cross-border trade, and a business-friendly environment in the region as key factors propelling Texas ahead of California in terms of population growth and gross domestic product (GDP).

📊Texas Gains:

In recent years, Texas has reaped the greatest benefits from declining populations in California, New York, and Illinois. While California's population currently stands at approximately 38.9 million, it has been on a downward trend since 2020, with around 800,000 residents leaving the state between 2020 and 2023, according to the nonprofit think tank, the Public Policy Institute of California.

💰GDP Growth:

As of 2022, Texas boasted a GDP of $2.355 trillion, whereas California's GDP was $3.598 trillion, according to data from the U.S. Bureau of Economic Analysis. Notably, California's GDP grew by 19% from 2020 to 2022, while Texas experienced a more substantial 31% growth during the same period. The trend of nearshoring in Mexico has been underway for several years but gained momentum since 2020, fueled by evolving U.S.-China trade dynamics and the supply chain disruptions triggered by the pandemic.

🇲🇽 Mexico and Texas Trade:

Trade in goods between Texas and Mexico reached $285.6 billion in 2022, marking a 24% year-over-year increase compared to 2021, according to data from the U.S. Census Bureau. In contrast, trade between California and Mexico totaled $91.3 billion in 2022, representing an 8% increase compared to 2021.

Courtesy: FreightWaves