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Surrounded by Supply: 5 Reasons Why Manufacturing Thrives in Texas

October 25, 2017 by Midlothian Economic Development

MED-surrounded-by-supply-5-reasons-why-manufacturing-thrives-in-texas.jpgTexas has come a long way from its pre-1900 days of lumbering, stone cutting, brick manufacturing, and flour and grist milling.

But while the industries might have changed over time, the power propelling them forward has not.

Today, Texas manufacturing has evolved into a variety of mature, dynamic industries including aerospace, aviation, automotive, information & computer tech, advanced tech & manufacturing, biotech, and more.

Of course, manufacturing cannot be mentioned in Texas without giving a proper hat tip to the state’s enduring oil, gas, chemical, and energy sectors.

When it comes to the nation’s top locations for manufacturing, globally renowned Site Selection Group ranked Texas No. 2 on its 2016 list of “Best States for Manufacturing.”

The prominent leader in location advisory, economic incentive, and corporate real estate solutions evaluated states on criteria ranging from labor force and tax climate to utility costs and logistics.

Texas is also a leader when it comes to manufacturing jobs, employing roughly 874,450 people at an average annual salary approaching $74,000.

Key manufacturers in North Texas alone include corporate giants Lockheed Martin, Texas Instruments, Raytheon, General Motors, Frito-Lay, Alcon Laboratories and Bell Helicopter – and that’s just the beginning of the state’s stellar story.

So why is the Lone Star State such a haven for manufacturing?

Abundant Workforce

With the second-largest civilian workforce in America – 13 million – Texans deliver a promise of diverse, skilled, educated and evolving talent. Companies with operations in Texas frequently report that their employees are dedicated, enthusiastic and solutions-oriented.

Companies also often enjoy tremendous applicant turnout for open positions. Fort Worth’s Lockheed Martin said that in a 24-hour period, at least 2,000 people applied online for available registration slots connected to the company’s hiring event back in July 2017. At the end of the day, more than 3,000 people showed up for the July hiring fair. The company held another job fair in August 2017 and anticipated talking to 2,000 or more applicants.

The Lone Star State also boasts innovative workforce training programs which include the state-funded Skills Development Fund. This fund helps provide local, customized training curriculum via partnerships between Texas businesses and public community and technical colleges.

And finally, a top-notch higher education system, encompassing universities as well as state, community, technical colleges and more, ensures a vibrant pipeline of talent for tomorrow’s business needs. 

Competitive Tax Climate

Lower taxes and less stringent regulations make Texas a perennial favorite for manufacturers on the move. The state’s highly competitive tax climate is free of corporate and personal income tax, and offers one of the lowest tax burdens in the nation. Texas is also a right-to-work state.

Additional business advantages include sales tax exemption for manufacturing machinery and equipment and R&D-related materials, software, and equipment, as well as franchise tax exemption to manufacturers, sellers, or installers of solar energy devices. Property tax abatements, permitting fee waivers, local cash grants and local funding are also available to assist companies looking to relocate or expand in the state.

Texas has a generous supply of creative incentives and financing options that consistently help make it one of America’s top states – not only for manufacturers, but for business, in general.

Reliable Utilities

With its own power grid and a deregulated electricity market, Texas offers vast amounts of energy resources at affordable prices.

In fact, electricity in Texas is cheaper, per kilowatt hour (kWh), than the national average which translates into substantial energy savings across the board for residential and commercial customers.

The state is well-equipped to meet manufacturing companies’ electric, natural gas, water, telecommunications needs – and more.

The Texas utility industry has a track record of delivering efficient solutions to manufacturers through high-quality products, competitive pricing and strategic partnerships.

Efficient Transportation & Logistics

The Lone Star State’s central location is equally central to its economic success. Thanks, in part, to its sheer geography, Texas enjoys a solid position as one of the world’s premier business destinations.

With 380 airports, 16 seaports, including 11 foreign trade zones, and 10,425 miles of freight rail – more than any other state – it’s easy to see how well-connected Texas is nationally and internationally.

Further, 313,220-plus miles of public roads – also more than any other state – ensure that it’s possible to find a road to nearly any market or destination.

Together, this fusion of road, rail and air assets translate into major market access and proximity to trade routes for manufacturers whose operations may be dependent upon quick access to Mexico and other critical logistical factors.

Supportive Government

Texas has long been known for its supportive business environment. From its affordability and resource-rich land to its regulatory flexibility, the state seeks to promote manufacturing growth and progress through pro-business policies.

State leaders understand that manufacturing is a dynamic catalyst driving the Texas economy forward and they continue to cultivate a setting that strengthens this sector.

According to the National Association of Manufacturers (NAM), manufacturers in Texas account for 14.5 percent of the total output in the state, employing 7.3 percent of the workforce. Total output from manufacturing was $238.38 billion in 2014, according to NAM’s 2016 data.

Strategic state economic development initiatives, coupled with a genuine commitment at the local level to foster business growth, are helping manufacturers succeed in an evolving world and are certain to keep Texas on the leading edge of industry progress.

 

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