Recent growth of professional services jobs favors select Texas counties - Dallasfed.org Skip to main content News and EventsCareers All Authors Series Topics Economy Economy Data Regional data U.S. data International data Energy data DataBasics Research Data Center (RDC)-- Regional economy Texas New Mexico Louisiana Dallas Fed Surveys Economic analysis Beige Book Economic indicators Texas Economic Update Texas Employment Forecast U.S. Economy Trimmed Mean PCE Market Value of Government Debt Weekly Economic Index International Economy Database of Global Economic Indicators International House Price Database Mexico Update Global Institute Events Conferences Global Perspectives Energy Center for Energy and the Economy Dallas Fed Energy Survey Energy in the Eleventh District Energy Indicators Energy Slideshow Publications Dallas Fed Economics Southwest Economy Southwest Economy Podcast Special reports Working papers Economists Focus areas/topics Community Community Communities blog In-depth reports Small Business Credit Survey Community topics Small business Workforce development Community Reinvestment Act Advance Together initiative Digital access initiative Our people Events Education Education Classroom Resources Building Wealth lesson plans Classroom-ready presentations Federal Reserve Education Publications Building Wealth Everyday Economics Navigate: Exploring College and Careers Student programs Personal finance workshop -- Events Tours information Banking Banking Banker resources Consumer resources Reserves maintenance Risk and surveillance Lending Discount Window Payments & financial services FedNow Financial services Reporting Financial reporting Regulatory reporting Structure reporting (NIC) Contacts Events Publications and reports Dallas Fed Banking Banking Conditions Survey Current Banking Risks Eleventh District Banking Trends Banking and finance articles About us About Us What we do Reserve Banks and the Fed Counties in our district Our branches El Paso Houston San Antonio Holiday schedule Work with us Transparency President Lorie Logan About Lorie Listening in 360° Calendar Public speaking events Our people Leadership team Regional executives Boards of directors Economists Dallas Fed advisory councils Federal Advisory Council Office of Minority and Women Inclusion Speeches Lorie Logan speeches and publications Leadership speeches Request a speaker Connect with us Attend our events Visit our exhibits Help us track the economy Ask a question or find a contact Do business with us News and EventsCareers HomeEconomyDallas Fed Economics Economy Economy home Data Regional data U.S. data International data Energy data DataBasics Research Data Center BigTex High-Performance Computing Regional Regional economy Texas New Mexico Louisiana Dallas Fed surveys Agricultural Banking Conditions Dallas Fed Energy Texas Manufacturing Texas Service Sector Economic analysis Beige Book Economic Indicators Texas Economic Update Texas Employment Forecast Mexico and border region All regional analysis Southwest Economy U.S. U.S. economy home Trimmed Mean PCE Market Value of Government Debt Weekly Economic Index All U.S. data International Global Institute International economy International House Price Database Database of Global Economic Indicators International data Energy Center for Energy and the Economy Energy research Dallas Fed Energy Survey Energy in the Eleventh District Energy Indicators Energy slideshow Publications Dallas Fed Economics Southwest Economy Special reports Working papers More publications Our people Economists Research analysts Visiting scholars Events Conferences Global Perspectives Seminars Request a speaker Focus areas/topics Recent growth of professional services jobs favors select Texas counties Ana Pranger and Yichen Su May 16, 2023 Professional services jobs have grown faster in Texas than in the U.S. since 2020, partly because of business relocations to the state. This expansion has been highly geographically clustered, with 10 of Texas’ 254 counties accounting for more than 92 percent of the statewide growth. Most of these areas have large, highly educated workforces. Migration of people and employers to Texas was strong even before the pandemic began in first quarter 2020. But recent research shows that migration to Texas has notably increased since then. The robust influx of domestic migrants brought business opportunities to Texas, helping the state to more quickly recover jobs lost during the pandemic and reclaim its prepandemic employment level by late 2021. By comparison, the nation didn’t recover its lost jobs until mid-2022. Local and professional services pace Texas growth In particular, Texas job growth strongly outperformed the nation in local and professional services. Local services refers to nontradable service industries (which provide services that are consumed locally), including construction, retail, accommodation and food services. Professional services involve tradable service industries (which provide services that can be consumed anywhere), such as information; finance and insurance; and professional, scientific and technical services. Texas employment increased 3.8 percent in local services and 14.2 percent in professional services from December 2019 (just before the pandemic) to December 2022. The performances outpaced the U.S., which had zero growth in local services and a 5.7 percent gain in professional services over the period. Professional services are a particularly valuable economic engine for the state. Professional services tend to be in high-wage industries, involving mostly high-skilled workers. The inflow of firms in these sectors and the jobs they bring are strongly beneficial for local economic development, stimulating growth in other types of employment. Given the significance of professional services, understanding where these businesses locate and expand is especially useful. Unlike local services jobs—which tend to accompany population growth—professional services employment accelerated in a confined set of Texas counties in the past two years. This growth is even more concentrated than the well-documented geographic clustering seen before the pandemic. Chart 1 shows the contributions to overall job growth in Texas and job growth in the local and professional services by the top 10 contributing counties relative to the other 244 counties. (The top 10 counties in terms of professional services jobs added were Bexar, Collin, Dallas, Denton, Fort Bend, Harris, Montgomery, Tarrant, Travis and Williamson; the top counties for local services jobs added were Bell, Collin, Comal, Denton, Ellis, Fort Bend, Hays, Hidalgo, Montgomery and Williamson.) Downloadable chart | Chart data More than 92 percent of the robust gains in professional services jobs in Texas were concentrated in 10 counties where 56 percent of Texans live. For comparison, 64 percent of Texas’ overall job gains and 64 percent of local services job additions were in their respective top 10 counties. Growth in professional services jobs is only slightly correlated with county population growth. In fact, many Texas counties with very high growth in professional services jobs, such as Dallas and Travis counties, experienced almost no population growth—or outright population declines—over the two-year period. Meanwhile, areas with population increases, such as largely suburban Collin and Williamson counties, noted faster professional services job growth relative to their already rapid population expansion. Moreover, the spatially concentrated growth in professional services jobs strongly favored high-income counties in Texas. Chart 2 shows the cumulative growth of local and professional services jobs in Texas counties with county-level median income higher and lower than the Texas state median income since the first quarter of 2019. Downloadable chart | Chart data While higher-income counties steadily outperformed lower-income counties in terms of job growth in local services before 2020, the difference in growth rates in professional services jobs between high- and low-income counties widened sharply after 2020. Professional services jobs attracted to education concentration Before the pandemic, many professional services firms located in traditional industry clusters such as Silicon Valley and New York. They remained anchored there because of their locally attached workers and local business ties. Some companies had already opened operations in Texas, but their activity was often limited. Though the prospect of completely relocating may have seemed promising, the cost of losing a fraction of the workforce and local business ties appeared too large to justify relocation. With normalization of virtual work during the pandemic, these firms could move to lower-cost environments such as Texas without all existing employees moving with them. The costs of conducting business from a distance, at least temporarily, declined as well, improving the feasibility of relocation. The few high-income counties that attracted almost all the new professional services jobs over the past two years in Texas share characteristics. They provide access to a local talent pool that businesses could tap into over the long term. Job growth in professional services tended to occur in counties that already had an abundance of college-educated workers (Chart 3). Downloadable chart | Chart data Even though fully remote work arrangements appear to be working for some white-collar firms, most businesses expect hybrid work to become the long-term norm. This means proximity to local talent may still be a factor in places where professional services firms choose to locate within Texas. Since professional services jobs tend to be highly paid and these employers often serve as an engine for local growth, a potential downside of this highly clustered growth pattern is that it could further widen regional disparities in economic development within the state. -- Share this About the authors Ana Pranger is a research analyst in the Research Department at the Federal Reserve Bank of Dallas Yichen Su is a research economist in the Research Department at the Federal Reserve Bank of Dallas. The views expressed are those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Demographics Economic development Labor Texas -- Dallas Fed Economics Research and analysis of economic trends and developments Home Archive By Topic Subscribe for email alerts Subscribe -- Related Articles Region’s commercial space exploration industry has lofty goals for growth, discovery Read more Young workers’ employment drops in occupations with high AI exposure Read more The Fatal Consequences of Brain Drain Read more Advances in AI will boost productivity, living standards over time Read more Quick links Global Institute Building Wealth Banking blog Communities blog Economics blog Visit us Publications About us Transparency Holiday schedule Careers Office of Minority and Women Inclusion Contact us Frequently asked questions Locations and teams Media relations Vendors and suppliers Website feedback Stay informed Get analysis, research, resources and event information delivered directly to your inbox. Subscribe Email address Sign Up -- Follow the Dallas Fed 2200 N. Pearl St., Dallas, Texas 75201 P: 214.922.6000 or 800.333.4460-- expand_less Top 2200 N. Pearl St., Dallas, Texas 75201214.922.6000 or 800.333.4460Terms of UsePrivacy Notice