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AI boom, tariffs and lack of immigration may challenge Texas economy this year

Nation's second-largest state GDP faces headwinds despite population boom
A lack of immigration is hitting some industries more than others, including construction. (Getty Images)
A lack of immigration is hitting some industries more than others, including construction. (Getty Images)
CoStar News
January 12, 2026 | 8:53 P.M.

The Texas economy, the nation's second-biggest, faces challenges stemming from tariffs hurting small businesses, increased immigration enforcement hitting the construction and agriculture sectors, and the growing use of artificial intelligence potentially reducing demand for office workers and workspace.

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