South Texas is facing economic challenges as oil prices continue to stay at historic low levels. The world economy is slowing down, while businesses and households across the nation are facing a new cycle of interest rate hikes. How does our region hold up against such economic crosswinds? Will our local economy suffer a meltdown as it did in the 1980s?
In this edition of the Aqua Book, we first review the recent shale oil cycle, particularly developments since its peak in mid-2014. We also compare the economic records of communities across South Texas, with a special focus on Corpus Christi.
Texans are especially proud of their state. After visiting with numerous local business groups in the past year, I believe that the resilience of our regional and state economies to an imminent meltdown rests largely on the exceptionally strong confidence and positive attitude shared by Texas entrepreneurs.
In addition to recent developments in the region, we provide an update on the emergence of the New Economic Paradigm, which promises to push the envelope of industrial development without compromising environmental quality. The dozen massive industrial construction projects underway near the Port of Corpus Christi are poised to play a key role in the region’s economic vitality going forward.
The final section takes a deeper look at factors that drive long-term economic development. Drawing on a host of ranking data, we present anecdotal evidence on our region’s competitiveness and quality of life in comparison with the rest of the nation. Hopefully those findings will help public officials and other decision makers better understand the strengths as well as weaknesses of this region.
As always, I appreciate your readership and support of our research.
Director, South Texas Economic Development Center
SHALE OIL CYCLE
The oil cycle between 2009 and 2014 was a classic economic textbook case about the rise and fall of a competitive industry. After oil prices rebounded to over $80 per barrel by late 2010 from below $40 during the depths of the global recession a year earlier, oil production in Texas rose explosively. World oil prices escalated in 2009 due in part to strong demand from emerging markets, notably China.
Other than high oil prices, advances in drilling technologies called fracking spurred oil exploration and drilling activities in the Eagle Ford and Permian Basin formations in Texas. By late-2012, the U.S. had surpassed Saudi Arabia as the world’s largest crude oil producer.
Supply and Demand
Oil prices are determined by market supply and demand conditions around the world. Without corresponding reductions in oil production in other parts of the world, oil prices must fall in response to the U.S. supply glut flooding the world markets. As Saudi Arabia and other OPEC members strived to keep their own market shares rather than holding up oil prices, excess supply of crude oil around the world led to nothing but further declines in market prices after mid-2014.
The oil markets entered year 2015 with prices returning to the early-2009 levels around $50 a barrel. Concerns about an economic slowdown in China exacerbated the oil price collapses to levels well below what would be economically feasible for U.S. energy companies to drill new wells.
In early 2015, a typical shale oil well in the U.S. remained profitable to drill. Despite the dramatic decline from the recent peaks over $100 just half a year earlier, crude oil prices then remained above the break-even prices for most U.S. oil producers. This means that oil revenues could at least cover the total cost of drilling a well and pumping oil out of the ground. According to Rystad Energy, the total cost averaged $32.6 per barrel for U.S. oil production in 2015. Out of this total, $21.5 covered capital expenditures for building facilities, pipelines and so on; and $14.8 went to operational expenditures, which included salaries of employees and administrative staff.
Among all major shale formations in the U.S., the Eagle Ford shale is currently most cost efficient, according to Rystad Energy. This means that oil production from that play has the lowest average break-even price. Just a few years ago when this South Texas shale region was still in its early development stage, most estimates for its break-even prices were over $60 per barrel. Falling breakeven prices over time were the outcomes of reductions in well costs together with increases in output per well. The advent of pad drilling has helped lower production costs by increasing the wells to be drilled by each rig, reaching 13 to 20 today in the Eagle Ford play.
As Texas shale oil production continued to raise the world’s oil supply without corresponding increases in demand, market prices began to take a nosedive in late 2014. In January 2016, oil prices plummeted to less than $30 per barrel, which was well below the break-even prices for most U.S. oil producers, including those in Texas. This means that U.S. oil producers would incur a loss for each barrel of oil they extracted from the ground.
Because of relatively high capital costs for developing new wells, drilling activity has fallen dramatically. However, oil well operators would continue to pump oil from legacy wells that have already been developed, as long as their revenues covered their operational costs.
They would cap their operating wells altogether only if the market price falls below their operational or variable costs. Economists refer to this condition as the shut-down point. This means that the typical U.S. oil producer would halt production when the crude oil price falls below $15 per barrel.
Oil Bust’s Impacts
Much of the economic impact of the upstream oil and gas industry comes from capital expenditures during the early stage of developing new wells. The recent oil price collapses immediately hit U.S. oil-producing regions with dramatic cutbacks in capital expenditures by energy companies and their suppliers. In South Texas, Weatherford and Halliburton were among the first to lay off employees, followed by Baker Hughes and others in oil field services.
Since January 2015, U.S. oil rig counts have been on steep declines in response to oil prices dipping below $50. Compared to their peaks in mid-2014, fewer than half of oil rigs are operating today in the Eagle Ford and Permian plays. Texas oil production also began to fall in July 2015. Because the productive life of shale oil wells is much shorter than that of traditional oil wells, total U.S. oil production will likely fall at a very rapid rate if oil prices do not rebound soon.
Between 2014 and 2015, the 41 counties in South Texas together shed about 6,000 oil field jobs. This region accounted for nearly one-quarter of all jobs lost in the state’s oil and gas industry. Nearly 5,000 of those positions were in support activities. About 1,200 positions were involved in drilling oil and gas wells, and some 200 positions were in oil and gas extraction. According to the IMPLAN model, each direct job lost in the oil field in South Texas would have led to another full-time-equivalent job disappearing in other industries within the region, from health care and accommodation to professional services and retail trade.
The 12-county Coastal Bend area of South Texas was particularly affected by the downturn in shale oil production, particularly McMullen and Live Oak counties that sit atop the Eagle Ford play. Oil and gas production accounted for 6.2 percent of employment in the Coastal Bend as opposed to 2.3 percent for the broader South Texas region. In 2015, this region alone cut more than 2,600 oil field jobs, nearly half of the job losses in South Texas.
Corpus Christi is also highly exposed to the decline of the oil industry, even though its oil- and gas-related employment share has reduced appreciably from the peak around 6 percent in the 1980s to 3.5 percent today. With more diversification across industries, this metro area suffered a rather modest loss of 564 jobs in oil field jobs in 2015.
DIVERGING REGIONAL DEVELOPMENTS
Texas is the largest oil-producing state in the United States. For this reason, the Texas state economy has been in the media spotlight. After experiencing extraordinary growth around 3 percent annually in 2013 and 2014, Texas’s statewide employment has indeed slowed down significantly since January 2015.
Despite the expected slowdown in employment growth, Texas’s statewide unemployment rate remained below 5 percent toward the end of 2015. A much more diversified economy, due largely to rapid growth in the information and health care industries, has been credited for the resilience of the state economy to an imminent meltdown.
The economic impact of the current oil bust varies significantly across the state. Among its major metro areas, Houston has a high exposure to oil, but Dallas-Fort Worth, El Paso and San Antonio do not.
For South Texas, however, the economic slowdown was more dramatic. Its employment growth hit the negative territory in the last quarter of 2015. Meanwhile, the nation as a whole continued to add jobs at a steady pace around an annualized rate of 2 percent. By the end of 2015, the nationwide unemployment rate also had fallen to near 5 percent—a level below that of the South Texas region for the first time since the end of the Great Recession in 2009.
Within South Texas, deterioration in labor market conditions has varied widely among metro areas. While movements of their employment growth tended to parallel each other historically, the effects of the recent economic slowdown have been more apparent for some areas than others. Year-over-year employment growth for Brownsville turned negative as early as March 2015, while San Antonio’s labor market has continued to expand albeit at a slower pace.
Due to its high exposure to the oil and gas industry, Corpus Christi posted the sharpest decline, dropping from about 3 percent near the end of 2014 to -1 percent a year later. While the setback in Corpus Christi’s job market seems severe, the impact of recent oil market collapse pales in comparison to the similar episode in the mid-1980s.
Job losses among oil-related industries were more visible in South Texas’s rural communities than in the metro areas. So far only the metro areas of Corpus Christi and Laredo have shown significant increases in unemployment. As in the similar oil episode of the 1980s, San Antonio’s more diversified labor market has continued to expand with declining unemployment rates, although a slowdown was also apparent.
Diverging South Texas Economies
In South Texas, the responses to falling oil prices since mid-2014 have varied widely across the region’s local communities. An exhibit below shows the patterns of business sales activity drawing on sales tax collections of the 41 counties and metro areas in the region beginning in June 2014. All data are scaled in relation to the first month’s data as the benchmarks. The dotted area delineates the spread of the data for the 41 counties over time.
The top of the range represents the sales activity for Goliad County, part of the Victoria metro area. Goliad’s sales volume by the end of 2015 was more than 50 percent larger than that in June 2014.
At the bottom of the range is Jim Wells County, whose sales volume shrank by nearly half over that same period. Several oil services and supplies firms in that county either downsized or left altogether in 2015.
The data for the five South Texas metro areas stay near the middle of the range over time. Despite some declines in year 2015, business activities of those areas remained close to the June 2014 levels largely because of their continued growth throughout the rest of 2014. Their trends beyond year 2015 will depend on how their individual economies will evolve.
A Tale of Two Counties
Despite an overall slowdown in the Corpus Christi metro area, its various communities are facing diverging economic patterns. Cities where those large-scale industrial sites are being constructed, notably Gregory and Ingleside in San Patricio County, have continued to experience surges in business activity, as evident in the growth of their sales tax volumes.
In contrast to an economic slowdown, the record number of industrial development projects in those communities mostly within San Patricio County have led only to growing pains for city officials in an effort to expand their community infrastructure and housing supply, among other things. For the city of Corpus Christi and other communities in Nueces County, however, business activity has generally scaled back since late 2014.
A TALE OF TWO OIL BUSTS
During a similar oil bust in the mid-1980s, Corpus Christi was hit the hardest among all metro areas in South Texas. In January 1986, oil prices plummeted from above $25 in 1985 to less than $13 a barrel. With about 6 percent of its workforce involved directly in crude oil production, Corpus Christi’s employment level shrank nearly 10 percent toward the end of that year. Its economy showed no signs of recovery until two years later, and it took another two years for the metro area to recuperate most of the jobs lost during that oil crash.
Despite the setback in the second half of 2015, the level of local employment was still near the levels in mid-2014 when oil prices reached the highs of about $120. Oil production continued to grow until June 2015. The setback for Corpus Christi’s labor market so far has also appeared to be modest by comparison. Yet drawing on the historical data of the 1980s, the downtrend was probably not over by the end of 2015. Rather it might take another six months through mid-2016 for the effects of the oil crash to work its way into the rest of the local economy.
Given the lessons from the 1986 oil bust, Texas and, in particular, Corpus Christi would be vulnerable to the recent oil price collapses. Although the pace of employment growth has indeed slowed down considerably, most economic indicators for the Corpus Christi metro area so far have shown no resemblance to the experiences of the 1980s. Like the state of Texas, the area economy is more diversified today, but general economic diversification is not the main reason for its resilience to the effects of the oil market collapse.
Instead, Corpus Christi is undergoing a facelift and a boom in both industrial and residential construction has offset many of the job losses associated with the falling oil-related activity. Beyond the temporary effects during the current construction phase, the dozen large-scale industrial plants under development near the Port of Corpus Christi are also poised to transform the economic landscape of the area.
For the broader South Texas region, however, the impacts of the booming industrial construction activities around the Port of Corpus Christi become less visible. On the contrary, the impact of a cutback in oil related activities, especially in the Eagle Ford region, is much more visible. Regional employment growth began to drift down as early as November 2014, and continued into the end of 2015 with negative rates.
Will South Texas survive the current oil bust? All told, our regional economy today remains on a solid footing. The Center’s recent Surveys of Business Conditions in partnership with American Bank revealed the caution held by many business owners. Yet their optimism in the near-term outlook also reflected the adage that “there is nothing to fear but fear itself.” Their business confidence and relentlessly positive sentiments will play a key role in the near-term direction of our regional economy.
CORPUS CHRISTI LABOR MARKETS
In early 2015, we presented our short-term economic outlook for Corpus Christi. Since predictions are meaningless without follow-up, we now compare our forecasts with the actual outcomes. We predicted that employment in Corpus Christi would grow at an annual rate between 1.1 percent and 3 percent in 2015.
Instead of a precise percentage point, we provided a cone-shaped forecasting range to highlight uncertainty at that time about the precise timing of the turning point for the local economy. We foresaw a slowdown in local employment trends in response to the plunging oil prices. However, economic theory offers no guidance regarding exactly how long it will take changes in the oil industry to affect other industries in Corpus Christi. This lag in the ripple effects depends on numerous factors, including how soon suppliers for oil companies will lay off their employees, and how soon the unemployed can find a new job.
As it turned out, during the first quarter of 2015, Corpus Christi’s employment growth continued on its upward trend established in the previous year. In May, employment growth slowed down dramatically and continued to dwindle through the rest of the year. As shown in the accompanying exhibit, the employment growth rate first moved along our upper forecast limit during the first four months of 2015, and then dramatically fell to the bottom of our projection range through year-end.
In addition to employment growth, we made predictions about Corpus Christi’s unemployment rate. For the first half of year 2015, the actual unemployment rates hovered over the lower limit of our forecasting range around 4.5 percent. After oil production began to take a nosedive in mid-year and a corresponding setback in the labor market, unemployment inched up gradually toward our upper limit of 5.8 percent by year-end. Unemployment is a lagging economic indicator, meaning that it typically moves more slowly than other economic indicators during an economic downturn.
In 2015, the average unemployment rate was 5 percent for the Corpus Christi metro area. For the 41-county region of South Texas, the average unemployment rate was higher at 6 percent. Unemployment is not evenly distributed across industries, so it would be instructive to identify the soft spots in the labor markets.
A breakdown of unemployment by industry in 2015 clearly shows the impact of the recent oil market collapses on the regional labor markets. Nearly one in five people previously working in South Texas’s oil fields were unemployed. The manufacturing sector also had relatively more workers claiming unemployment due in part to recent layoffs among equipment suppliers for oil operators. On the contrary, employees in the service industries tended to be less likely to become unemployed.
According to EMSI’s data, about 10,600 adults in Corpus Christi were unemployed during 2015. Nearly one in five (16%) of them were new entrants to the workforce with no previous work experience. A breakdown of the number of unemployed by industry would help us better understand the extent of slack in our local labor market.
The impact of unemployment in a particular industry on the entire local economy depends on the size of that industry. In the past year, the impact of the declining oil industry was evident. Some 1,400 people previously working in the mining industry, including oil and gas extraction, were unemployed. Together they accounted for 13 percent of the total number of unemployed locally, more than double that in the previous year. The concentration of unemployed individuals in the local oil and gas industry was also relatively high in comparison with the broader South Texas region.
Given the ongoing construction boom in Corpus Christi, it seems counterintuitive that the construction industry was responsible for a share of local unemployment equal to that of the mining industry. Even though the unemployment rate among construction workers was only one-third that of the mining industry, the size of the construction sector by employment was second only to health care sector. A 6-percent unemployment rate for the construction workforce translates into more than 1,350 unemployed people. In fact, the number of unemployed in the construction industry reduced by more than 100 between 2014 and 2015. Other than unique characteristics of its workforce, the temporary or cyclical nature of that industry was responsible for its relatively high unemployment level.
NEW ECONOMIC PARADIGM
Corpus Christi and especially its deep-sea port are unlocking their logistical and geographic advantages as the nation’s gateway to the rest of the world, from Europe and Asia to Central and South America. The Port Authority is positioning Corpus Christi to be “the energy port of the Americas.”
Sailing into the Future
At the end of 2015, the U.S. federal government repealed a 40-year ban on the export of crude oil and condensates to foreign countries. On the New Year’s Eve, the Theo T oil tanker left Port Corpus Christi with the first U.S. export shipment of crude oil in four decades.
Meanwhile, the Port is about to undergo a facelift. In addition to a commitment of $1 billion in capital improvement projects for the next 10 years, including new docks, storage expansion and infrastructure improvements, a new and taller Harbor Bridge is scheduled to be constructed beginning in 2016, along with the deepening and widening of its ship channels.
As the nation’s fifth largest port by tonnage, Port Corpus Christi’s rapid development in recent years hinged on its geographic proximity to an abundant supply of oil and natural gas from the Eagle Ford region. The pipeline infrastructure in South Texas is also part of the most sophisticated network in North America. Oil exports from Corpus Christi will potentially grow with the increased supply of oil and gas from the Eagle Ford and Permian formations.
Big in Texas
Oil and gas resources from South Texas are playing a vital role in powering industrial development in South Texas. Within the next two years, some of the world’s largest and most technological advanced industrial plants will become operational in Corpus Christi. Cheniere Energy’s $20 billion liquefaction facility is the largest single privately financed construction project in the U.S. today. Next to the Cheniere site is the world’s largest manufacturer of iron briquettes that is being developed by an Austria-based firm voestalpine. Nearby, TPCO America’s $1 billion steel mill will also be the largest manufacturer of seamless steel pipe outside China. Located in the Inner Harbor of the port, M&G’s $880 million plant will also be the largest facility in the world for the production of resin products. These industrial facilities will be heavy consumers of Texas’s natural gas or crude oil as energy sources or feedstock.
The New Economic Paradigm in South Texas reflects not only the sheer sizes of the emerging industries. The common perception about industrial development is that it will inevitably diminish the environmental quality of the region. This will probably not be the case for those new industrial projects, all of which will rely on natural gas as opposed to the conventional petroleum coke as energy supply.
M&G, TPCO, and voestalpine will also be heavy users of water mostly for cooling purposes; but they will either operate their own desalination plants with seawater or recycle most of the water consumed during the operations. Officials of those new facilities have also made strategic plans to minimize their footprint and emissions, while making their operations most cost efficient by their own industry standards. All told, those facilities promise to be not only the largest but the most environmentally friendly projects in the world.
Port’s New Role
Another aspect of the emerging economic paradigm is the increasing role of Port Corpus Christi in regional growth. The Port has passed its tipping point from being an importer to an exporter in cargo shipments. Expansion in outbound traffic is expected to continue first with exports of crude oil and condensates to foreign destinations. Shipments of other commodities will also pick up in the next few years when much of the output from the newly developed industrial sites will be destined for export to Europe, South America and Asia through the Port.
Meanwhile, the Port is making strategic plans to expand its core operations by leveraging current developments around the world, especially Latin America, such as the expansion of the Panama Canal, Mexico’s recent energy reform, and expansion of port facilities in Latin American countries. Partnerships with foreign stakeholders will expand the Port’s growth potential and trade opportunities for local businesses.
Quality of Life
The New Economic Paradigm will come with higher living standards as a result of higher incomes for the skilled workforce involved in the new manufacturing industries. The ultimate goals of regional economic development are high quality of life and the well-being of its residents. To this end, we will take a close look at different indicators of the quality of life in South Texas today relative to the rest of the nation. The findings, as detailed in the next section, will hopefully help us identify the region’s long-run advantages as well as challenges ahead of the arrival of the New Economic Paradigm.
SOUTH TEXAS CITIES BY THE RANKINGS
What sets South Texas apart from the rest of the nation? In recent years, most communities in this region leveraged the effects of the U.S. shale oil revolution with extraordinary growth. Now that the oil boom has come to an end, the regional economy will likely return to its historical path over time. It would therefore be helpful to see how the region stacks up in the context of its business competitiveness and quality of life. To this end, this section summarizes the findings of a large number of rankings compiled by WalletHub for U.S. cities.
Like the rest of the Lone Star State, most metro areas in South Texas fared well by comparison from the perspective of recent economic growth. In a recent survey of WalletHub, all South Texas cities except Brownsville were within the top 10 percent of America’s fastest growing cities. The metrics for the rankings include job growth, change in unemployment and population growth between 2008 and 2014. It is no surprise that the top five fastest growing cities were all in Texas, which benefitted much from the shale oil boom during that period.
Among the 515 cities in the 2015 survey, Edinburg and Corpus Christi joined other cities in Texas as leaders in recent economic growth. Edinburg took the 12th place and Corpus Christi ranked 22nd. Even the lowest ranked city in South Texas—Brownsville—outperformed two-thirds of other U.S. cities.
The housing markets in South Texas were also quite healthy in 2015. The WalletHub survey took into account real estate conditions as well as affordability and overall economic conditions. Among the 300 markets in the survey, Laredo had the 40th healthiest market, San Antonio 61st, followed immediately by Corpus Christi.
Beyond recent growth, the South Texas economy is vibrant with ample economic opportunity for job seekers and entrepreneurs. To assess the health of job markets, WalletHub has compiled city rankings in terms of the ease to start a career or find a job. The specific metrics include the numbers of entry-level and professional jobs, starting salaries, workforce diversity, housing affordability and a host of quality of life measures.
In South Texas, Corpus Christi is considered the best city to start a career, as it offers relatively more professional opportunities. Other cities trailed Corpus Christi in opportunities for professional jobs, but San Antonio offered an overall higher quality of life, especially in better housing affordability and recreational activity.
Along with more job opportunities, Corpus Christi is within the top tier of hardest working cities in America. The survey for “hardest working cities” weighed in the average workweek hours and labor force participation rate. In Corpus Christi, 74 percent of the adult population joins the workforce, and people work on average 40.3 hours per week. Both are the highest among the metro areas in South Texas.
Small Business Environment
Due in part to the state’s business friendly environment, all cities in South Texas fared very well in the WalletHub survey for the best cities to start a business. The survey compares numerous factors for nurturing start-ups, including financing accessibility, office space affordability, and employee availability. According to its survey of 150 cities, Laredo ranks 18th, followed by Brownsville (22rd) and Corpus Christi (33rd). It is quite easy to start a business in South Texas. San Antonio earns the lowest ranking of 59th, due largely to relative difficulty for businesses to access capital resources.
Particularly for Hispanic entrepreneurs, Corpus Christi and Laredo offer the best business environment due in part to their relatively large Hispanic population that provides abundant opportunities for businesses catered to Hispanics, such as food services.
Efficiency in the public sector plays a role in a community’s long-term economic development. The local governments in South Texas have proven to be relatively efficient. WalletHub evaluates how cities are run by calculating the return on investment (ROI) for three types of public expenditure: education, police, and parks and recreation. This survey of 108 cities includes Corpus Christi and San Antonio, which are ranked, respectively, the sixth and seventh best run American cities.
Corpus Christi earns the 11th place in ROI for education, and 26th in ROI for police. However, its 55th place for spending on parks and recreation is less impressive than that for San Antonio, which ranks 11th in this spending category.
Quality of Life
A community’s overall quality of life depends on a multitude of factors, some which can be subjective. Due in part to its climate, residents in South Texas tend to lack outdoor activities. In the WalletHub survey specifically for an active lifestyle, Laredo is ranked last among 100 U.S. cities due to its lack of sports facilities and outdoor environment, as well as low participation of recreation from residents. The rankings for Corpus Christi and San Antonio are similarly low.
Despite a lack of recreational activities, cities in South Texas fare quite well for families to live in. The WalletHub survey balances measures of family activities and fun, and health and safety with education and child care, and housing affordability. Except Brownsville, those South Texas cities included in the survey receive high scores for the levels of education and child care in addition to high housing affordability. While South Texas appears to be a good area to raise a family, the region has relatively low education attainment. According to WalletHub, the metro areas in South Texas are among the least educated cities in America due largely to the low percentages of their population with a college degree. Brownsville is dead last in the sample of 150 cities.
As for education attainment, the levels of financial literacy are relatively low among residents in the region. The average credit scores for the cities in South Texas were among the lowest in America. San Antonio has the highest average credit score in the region, but it is still below the 20th percentile nationwide.
Among other things, the quality of life and workforce readiness of a region are key factors for business relocations and thus sustainable economic development. Those factors might have played a role for the exodus of corporate headquarters particularly from Corpus Christi in recent decades.
Yet Corpus Christi is in the midst of a virtuous cycle. The emergence of new industries will better enable the community to improve various aspects of its overall quality of life, such as development of additional recreational facilities in its downtown area and other amenities across the metro area. Such developments will in turn boost future business and economic development.
The cities in South Texas are highly diverse in the board sense of diversity. WalletHub has scored each city’s level of overall diversity by scores in a number of perspectives, including economic class diversity, demographic diversity, diversified economy, and household diversity. Economic class diversity is specifically measured by diversity in income, education and so on. Demographic diversity is further broken down into diversity in ethno-racial groups, languages and birth places.
Corpus Christi is the 36th most diverse city in the nation, and San Antonio takes the 37th place. The high ranking of Corpus Christi’s overall diversity is partly due to its relatively diversified economy, which balances the traditional energy and manufacturing industries with a relatively high service sector. Laredo is relatively low in overall diversity due largely to its least diverse population among all U.S. cities.
In the context of economic class diversity, then the cities in South Texas are in the middle of the rankings. WalletHub measures this type of diversity by the distribution of households by income and education attainment.
South Texas itself is a diverse region. According to WalletHub, its border cities least resemble the United States. Their rankings are based on the scores of a host of socioeconomic, housing, economic, and education statistics against the national average. McAllen-Edinburg-Mission was considered the metro area least resembling the U.S., followed closely by Brownsville-Harlingen and Laredo. In other words, those cities along the U.S.-Mexico border are distinctively unique in their Tex-Mex socioeconomic characteristics. Corpus Christi and San Antonio, by contrast, are much more like the typical American city.
So what can we make out of the host of rankings? All told, South Texas is unique in its demographics and socioeconomic landscape, which make it one of the best areas to find work and to start a business. On the other hand, cities in this region are trailing the rest of the nation in various aspects of quality of life, which is key to regional competitiveness and economic vitality in the long run.
This is a SouthTexasEconomy publication.