2024 Texas Economic

Outlook Report
What are the most promising market opportunities that business leaders in Texas
are optimistic about, and what are the biggest challenges that could potentially
have a significant impact on our state this year? Explore this research-driven report
to gain valuable insights from local leaders on their current perspectives and
timely observations regarding the anticipated progress of businesses in Texas.

This publication was produced by The Business Journals

Content Studio and Texas Capital. THE BUSINESS JOURNALS
Table of contents

Research methodology 3

Outlook on the national economy 4

Outlook on the Texas economy 5

Revenue projections 6

Capital expenditures projections 7

Hiring 8

Conclusion 9

About Texas Capital 10

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS

Research methodology

The purpose of this joint research project with through an email campaign targeting business
Texas Capital and The Business Journals was to leaders in the four markets. A survey link was
get a pulse on how business leaders in Texas are sent in an email from each local market publisher.
feeling about the outlook of the national economy Additional recruitment took place via in-article
and the state economy of Texas in the coming modules on the publications’ websites. The
year while homing in on several areas, including: responses were fielded in October 2023.
• The outlook for the state and national
economies for the current year A total of 716 respondents participated in the
• Factors that companies are expecting to research. The population represents a majority
impact them in the coming year of top management business executives with the
• Expectations for 2024 regarding such largest group being business owners. Here is a
components as revenue, staffing and capital breakdown of respondents by market:
expenditures • Austin ­­— 207 respondents
• Dallas — 193 respondents
The Austin, Dallas, Houston and San Antonio • Houston — 190 respondents
Business Journals conducted an online • San Antonio — 126 respondents
quantitative survey. Respondents were recruited

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 3

Outlook on the national economy:
More pessimistic than that of Texas

In the survey, only 32% of Texas business leaders State of the National Economy
claimed to have a positive outlook of the national
13% 10%
economy in the coming year. For both the
Texas and national economies, the number of 19% 22%

respondents with a neutral outlook were almost

21% 19%
the same (18% versus 21%), compared with the
53% who had a negative view of the national
33% 32%
economy.

14% 17%
Austin is the most optimistic about the future
state of the national economy with 36% feeling Currently Over next 12 months

generally positive, while Houston is the least

optimistic and least neutral with 32% feeling Mostly negative outlook Somewhat negative outlook Neutral outlook

positively and 54% feeling negative about the Generally positive outlook Somewhat positive outlook

coming year.

Future State of the National Economy — Breakout by Market

Austin (A) Dallas (B) Houston (C) San Antonio (D)

NET (Generally/somewhat positive outlook) 35% 30% 30% 30%

Generally positive outlook 10% 9% 9% 11%

Somewhat positive outlook 25% 21% 21% 19%

Neutral outlook 16% 26% ACD 15% 16%

NET (Mostly/somewhat negative outlook) 49% 44% 55% B 54%

Somewhat negative outlook 29% 30% 36% 36%

Mostly negative outlook 20% 14% 19% 18%

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 4

Outlook on the Texas economy:
Optimism abounds

Business leaders in the state’s four largest State of the Texas Economy
metropolitan areas agree: The economic outlook
for Texas in 2024 is positive — exceeding 28% 27%
the outlook for the U.S. Optimism, based on
expectations ranging from the opportunity for
growth and expansion to businesses moving into 37% 38%

the state, is high despite anticipated obstacles

such as interest rates, government/political 18% 17%

conflicts and the lingering prospect of a recession. 14% 15%

Only 20% of business leaders in the state felt 3% 3%

negatively about the current Texas economy. Currently Over next 12 months

For the next 12 months, the positive view of the Mostly negative outlook Somewhat negative outlook Neutral outlook

Texas economy is nearly the same as for the Generally positive outlook Somewhat positive outlook

current economy.

Within the state’s major cities, respondents in

Dallas are more positive about the state’s economy
than those in Austin, Dallas and Houston. Three-
quarters of Dallas business leaders view the state’s
economy positively now and for the coming year.

Future State of the Texas Economy — Breakout by Market

Austin (A) Dallas (B) Houston (C) San Antonio (D)

NET (Generally/somewhat positive outlook) 61% 73% AD 65% 60%

Generally positive outlook 26% 32% C 22% 30%

Somewhat positive outlook 35% 41% D 43% D 30%

Neutral outlook 17% 13% 15% 21% B

NET (Mostly/somewhat negative outlook) 22% B 14% 19% 19%

Somewhat negative outlook 18% 12% 16% 15%

Mostly negative outlook 4% 2% 3% 4%

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 5

Revenue projections

Change in Revenue over Next 12 Months

48%

22%
19%

8%
3%

Large decrease Small decrease Will stay about the same Small increase Large increase

Change in Revenue over Next 12 Months — Breakout by Market

Austin (A) Dallas (B) Houston (C) San Antonio (D)

NET (Large/small increase) 62% 69% 75% A 64%

Large increase 25% B 12% 21% 18%

Small increase 37% 57% A 54% A 46%

Will stay about the same 26% 19% 18% 25%

NET (Large/small decrease) 12% 12% 7% 11%

Small decrease 9% 9% 5% 11%

Large decrease 3% 3% 2% 0%

Two-thirds of Texas business leaders expect their

revenue to increase over the next 12 months, Reasons for Expected Revenue Increase
including 48% who expect a small increase and
19% who anticipate a large increase.

39% 32% 27%

Houston leaders were the most optimistic,
followed by those in Dallas, but more than six
of 10 respondents from all four cities expect an
increase. Expanding the
scope of the current
Expanding into new
geographic markets
Launching a new
product or service
product/service line

Austin respondents more often cited exapanding

the scope of the current product/service line
21%
as the reason for revenue growth, while San
Antonio business leaders listed expanding into
new geographic markets as the primary driver in Other, includes: Organic growth, higher prices, more
staff, more clients/accounts, increased marketing/
growing revenue. business development efforts and market share

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 6

Capital expenditures projections
expected to increase

Change in Company’s Capital Expenditures in the Coming Year

39% 38%

11%
8%
4%

Decrease a great deal Decrease slightly Will stay about the same Increase slightly Increase a great deal

Half of Texas business leaders expect their capital Areas Where Company’s Capital
expenses to increase slightly or a great deal over Expenditures Will Increase
the next 12 months, nearly 40% anticipate them
being flat and only 12% expect to spend less on Technology adoption/upgrades 51%

capital expenses than in 2022.

Marketing and/or advertising efforts 47%

Business leaders in Austin and San Antonio Employee training/development 38%

ranked highest in being most likely to increase
capital spending in 2024 by “a great deal,” with Employee health and/or financial benefits 32%

one in five projecting such a boost. Respondents

Expand operation into new location(s) 30%
in Austin led in saying they plan to spend more
on technology adoption/upgrades, while San Creation of a new product or service 29%
Antonio was most likely to increase spend in
creating new products/services. Dallas’ and New office or remodeling 28%

Houston’s plans for spending were about the

Acquiring another business 13%
same, at 40% and 45% respectively.

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 7

Hiring

Regardless of how they view the current employee Talent Acquisition Plans over the Next Year
talent market, more than six in 10 plan to increase
the number of employees in the year ahead, and Increase workforce by 10% or more 23%
only 3% plan a decrease.

Increase workforce by 5% to 9% 15%

Austin business leaders led in hiring more with
63% planning to add employees, including 18%
who plan to increase by 5% to 9% from current Increase workforce by 1% to 4% 21%

levels. Not far behind are Dallas (59%) and San

Antonio (60%). Houston business leaders were Keep the same level of employees,
but freeze all new hiring
9%
less optimistic, with 54% projecting they would
increase their total employment. Keep the same level of employees 29%

Business leaders nationwide have been

Decrease workforce by 1% to 4% 1%
challenged in finding and keeping quality
employees, an issue that hasn’t bypassed Texas.
Although four out of 10 respondents say they have Decrease workforce by 5% or more 2%

had little or no difficulty finding or retaining talent

over the past 12 months, six out of 10 said they
have found it significantly or extremely difficult.

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 8

Conclusion

The next 12 months present challenges for Texas expansion but their businesses’ as well. The
businesses. They are not immune from issues all number of businesses moving to Texas — which
businesses in the U.S. are facing. Interest rates naturally plays a role in economic growth — is
and inflation are dominant concerns, especially in another reason for the optimistic outlook among
Houston and San Antonio. the state’s business executives.

In San Antonio, business owners are significantly But the confidence Texas business leaders have
more concerned about rising cost of labor and in revenue growth, the investments they plan
real estate in 2024. to grow their businesses with, and their plans
to increase their employment to accommodate
Looking ahead, most executives anticipate rising growth are why they expect the Texas economy to
interest rates, inflation and a looming economic easily outperform the national economy.
recession to have a fairly large impact on their
businesses. To learn more about how Texas Capital can
support your company’s goals in 2024, visit us at:
Nearly 25% of Texas business leaders are excited www.texascapitalbank.com/commercial-banking
about not only the state’s economic growth and

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 9

About Texas Capital

Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), contained. Nothing in this document constitutes
a member of the Russell 2000® Index and the S&P investment, legal, accounting or tax advice or
MidCap 400®, is the parent company of Texas a representation that any investment strategy
Capital Bank, a full-service financial services firm or service is suitable or appropriate to your
that delivers customized solutions to businesses, individual circumstances. This document is not to
entrepreneurs and individual customers. Founded be relied upon in substitution for the exercise of
in 1998, the institution is headquartered in Dallas independent judgment. This document is not to
with offices in Austin, Houston, San Antonio and be reproduced, in whole or part, without the prior
Fort Worth, and has built a network of clients written permission of Texas Capital Bank.
across the country. With the ability to service
clients through their entire lifecycles, Texas For more information, please visit:
Capital Bank has established commercial banking, www.texascapitalbank.com
consumer banking, investment banking and wealth
management capabilities. All services are subject
to applicable laws, regulations and service terms.
Member FDIC.

The information provided herein is for

informational purposes only and is expressed
as of the date hereof and is subject to change.
Texas Capital Bank and its affiliates assume no
obligation to update or otherwise revise these
materials. The information presented in this
document has been obtained from and analyzed
by Texas Business Journal and Texas Capital Bank
does not represent or warrant its accuracy or
completeness and is not responsible for losses
or damages arising out of errors, omissions or
changes or from the use of information presented
in this document. This material does not purport
to contain all of the information that an interested
party may desire and, in fact, provides only a
limited view. Any headings are for convenience of
reference only and shall not be deemed to modify
or influence the interpretation of the information

2024 Texas Economic Outlook Report THE BUSINESS JOURNALS 10