An economic bloc emerges in Central Texas

Tucked away in the back of Texas State University’s engineering school facility waits a machine constructed by a team of students who contributed their growing expertise and varied backgrounds to a single design: a racecar capable of hitting 80 miles per hour and accelerating so quickly the driver bragged about being thrown back into the seat.

Federal Reserve Bank of Dallas President Lorie Logan met with the students leading the Bobcat Racing team that was born in a garage a few years before in San Marcos, Texas, and now races in multiple competitions worldwide.

She was drawn to the region as part of her Listening in 360 visit by a similar economic collaboration. Local leaders along the Central Texas corridor have had to band together in a race to keep up with a booming influx of companies, workers and investment that is driving one of the world’s leading economies.

One estimate from a local economic development leader President Logan met showed roughly 1,200 people are moving into two counties around the San Marcos region per month.

The issue the alliance faces now is whether they can develop enough skilled workers and solve the kinds of housing and energy issues that come with this growth in order to stay on track.

A new generation of workers makes its own space

In Central Texas, a combination of a drop in immigration and the rush to build data centers to support the growth in artificial intelligence (AI) has created a need for skilled labor and higher costs for obtaining these workers.

Labor that once took up 30 percent of the costs of a construction project now accounts for half in some cases, a development that directly impacts inflation along with higher prices for supplies and insurance, one construction industry executive told Logan.

Texas State University (TSU) leaders showed President Logan their makerspace facility that gives their engineering students the chance to learn skills such as machining, 3-D printing, computer-aided design and welding. A student program even allows seniors to work on projects for outside companies as part of their coursework.

Local leaders said they’re worried about how transferable some of the jobs springing up from the AI buildout will be, compared to oilfield work that carries over during slowdowns in energy prices.

They’re hoping efforts like the one by TSU’s engineering department, which is the fastest growing department in the university, could, in time, prepare students for whatever needs the job market will have.  

“I tell students we’re training you to play in the Olympics without telling you what sport you will be playing, which is actually a liberating feeling once you embrace that,” Sanjay Ramchander, dean of the McCoy College of Business at Texas State University, told President Logan.

Industry contacts have said there is a shortage of skilled workers. TSU’s growing engineering department developed a space to get students ready for a changing labor market.

With growth comes housing issues

President Logan met with a student at TSU who started his own welding business. He sells a range of artwork and tortilla presses. Business has been so good, he hired a couple of fellow students to help out.

San Marco’s population grew 63.8 percent from 2010 to 2024. And for a college town that finds itself in a corridor of booming population growth, students can find it hard to find an affordable place to live while they continue their education and get their careers off the ground.

The university has been focused on building student housing that strips out many costly amenities to provide more options at lower prices.

Meanwhile, the housing market off campus has shown signs of slowing down from the post-pandemic boom.

The median home price in San Marcos was 13.5 percent lower in August 2026 compared to August 2025. One university leader told President Logan TSU works with private developers who often ask for signoffs on tax-exempt projects around the school as rates have gone up and cost concerns have risen for buyers.

‘A world of blocs’

In a conversation with President Logan, Agustín Carstens, former general manager of the Bank for International Settlements (BIS) and former governor of Banco de México, shared his perspectives on the Mexican economy and the uncertain path for trade with the U.S. that has already caused investment to suffer.

During the event, one of the Dallas Fed’s Global Perspectives series at the San Antonio branch, Carstens talked about connections. As part of the BIS, which acts as the bank for central banks, he frequently convened policymakers from around the world in the same way many local leaders in attendance, once rivals, have been gathering to tackle shared issues they’re facing in the region.

“The world now has become a world of blocs,” Carstens said. “And I think it is to the convenience of all North Americans to have a strong region and a region that is integrated, a region that can complement each other and can be a real force in all different aspects.”