5 Reasons Why Texas Is the Best State for Manufacturing

5-Reasons-Why-Texas-Is-the-Best-State-for-Manufacturing

While the manufacturing industry has changed significantly, the power propelling it forward has not. Texas manufacturing has evolved into a variety of dynamic industries including aerospace, aviation, automotive, information technology, biotech, and more.

When it comes to the nation’s leading locations for manufacturing, Global Trade Magazine and IndustryWeek consistently consider Texas as one of the best states for manufacturing. In fact, Texas employs more than 901,000 people in manufacturing-related positions, which is 3.5 percent higher than the number of manufacturing employs a year prior.

Key manufacturers in North Texas alone include Lockheed Martin, Texas Instruments, Raytheon, General Motors, Frito-Lay, Alcon Laboratories and Bell Helicopter — many of which continue to expand.

Texas Instruments, for example, recently announced plans to build a $3.1 billion semiconductor facility in Richardson, Texas. The 870,000 square-foot plant is expected to create more than 488 jobs in the North Texas area.

Below, we explore five reasons why the Lone Star state offers one of the best locations for manufacturing.

1. Access to Skilled Talent

Texas offers prime access to diverse, skilled, educated, and evolving talent with the second-largest civilian workforce in America — 13 million people.

As such, companies with operations in Texas 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 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.

Additionally, a top-notch higher education system of universities as well as state, community, and technical colleges, ensure a vibrant pipeline of talent.

2. Fewer Taxes & Regulations

Manufacturers on the move consider Texas a top contender for relocation, thanks to its lower taxes and less stringent regulations. The right-to-work state is free of corporate and personal income tax and offers one of the lowest tax burdens in the nation.

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. Companies looking to relocate or expand in the state can also take advantage of property tax abatements, permitting fee waivers, local cash grants, and local funding.

3. Vast Amounts of Resources & 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 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.

4. Efficient Transportation

The Lone Star state’s central location is equally central to its economic success. 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.

5. Pro-Business Policies

From its affordability and resource-rich land to its regulatory flexibility, Texas seeks to promote manufacturing growth and progress through pro-business policies.

According to the National Association of Manufacturers (NAM), manufacturers in Texas account for 13.3 percent of the total output in the state, employing 7.1 percent of the workforce. Total output from manufacturing was $226.16 billion in 2017, with an average annual compensation of $82,544 in 2016, according to NAM’s 2018 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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