Texas, the national leader for Fortune 500 headquarters, picked up fewer new businesses this year than at any time in the past five years as economic concerns make corporations weigh the costs of moving.
There have been 16 headquarters relocations to the Lone Star State so far this year, down significantly from the 62 in 2021.
Most of this year’s relocation activity was in the Dallas-Fort Worth area, with 10 headquarters moves from another state, according to a report from YTexas, a business networking organization.
Caterpillar Inc., a Fortune 500 company that makes construction equipment, was among the most notable corporate relocations in 2022. The company moved its headquarters from the Chicago area to Irving, Texas, in the Dallas area where it already had major operations.
The Houston area gained four headquarters relocations this year while the Austin area had two, according to the report.
Texas was a top destination during the pandemic for companies relocating from California, including electric vehicle maker Tesla's move in 2021, global infrastructure design and consultancy giant AECOM's in 2021 and commercial real estate brokerage CBRE's in 2020.
The moves by those Fortune 500 companies and others helped contribute to Texas having the most Fortune 500 headquarters than any other state for the first time in a decade, according to the magazine's annual list this year. New York previously held the top spot for the past seven years.
Affordable homes, access to top talent and no state income tax are often cited as reasons for companies to move to Texas. But it appears those relocations might have peaked or are tapering off amid the current economic climate and fears of a recession. In addition, political issues might be in play.
Texas, led by Republican Gov. Greg Abbott, does not allow abortions, prompting some companies to say they will cover costs for employees who have to travel to get an abortion.
Meanwhile, headquarters relocations don't always mean more real estate, especially with the rise of remote work, and sometimes just mean moving an official address to where a company already had office space.
Texas had 30 headquarters relocations in 2020, 24 in 2019, 36 in 2018 and 19 in 2017, according to YTexas.