clockwise from top-left: Texas is the nation’s wind power leader; Medical device maker Greatbatch is
establishing a new global headquarters in Frisco; The SpaceX Dragon was designed and manufactured in McGregor, Texas; A network of suppliers supports production at Toyota’s San Antonio plant; The one-million-square-foot Tenaris SA facility, which will open in 2016, is expected to produce 600,000 tons of pipe annually for the oil and natural gas industries.
Texas just keeps rolling along — since 2010 no state has added more jobs (in 2012 alone Texas outpaced California in job growth by over 150,000 jobs). Not only is the state’s energy sector booming, but Texas continues to attract multi-billion dollar investments across a range of industry sectors as more companies, eager to shed governmental red tape, come to Texas to bask in its low-cost business climate and get their products to market more quickly.
In 2012, for the eleventh year in a row, Texas was the number-one exporting state in the nation, according to annual trade data compiled by the U.S. Department of Commerce. Texas exports for last year totaled $265 billion, a 5.5 percent increase from $251 billion in 2011, outperforming overall U.S. exports, which only grew by 4.3 percent. Top exports were petroleum and coal products, chemicals, computer and electronic products, nonelectrical machinery, and transportation equipment.
“The fact that Texas was ranked the nation’s top exporter demonstrates that our strong economic climate provides a broad range of opportunities for businesses to succeed,” says Governor Rick Perry. “Our longstanding commitment to holding the line on taxes, keeping our work force strong, and maintaining reasonable regulations and fair courts have led to more than a decade of leading the nation in exports.”
Strong trade depends on having modern, efficient infrastructure in place with adequate capacity — highways, railroads, airports, and ports — plus the logistical systems and know-how to keep everything moving smoothly. No state is better positioned with its infrastructure than Texas is to maximize trade — especially along north-south routes to NAFTA partners Mexico and Canada, Texas’s two top trading partners. In 2011 Texas exported more goods to Mexico ($87.4 million) and Canada ($22 million) than to any other countries.
Texas is traversed by more than 300,000 miles of public roads, more than any other state, including nine interstate highways. I-35 and I-29 are busy trucking routes with direct access to Mexican and Canadian trading centers. With 380 airports, including Dallas-Fort Worth International and George Bush Intercontinental in Houston, Texas has the second-largest airport system in the country.
Then there are the 624 miles of Texas coastline, with 16 bustling seaports, including 12 deepwater ports. Ten of these ports are foreign-trade zones, which are excluded from a number of formal Customs entry procedures, quotas, and other restrictions. In 2011 the Houston-Galveston U.S. Customs District ranked first in the country for waterborne foreign trade, with a total volume of about 262 million metric tons.
Connected to this network of high-capacity shipping routes are two master-planned logistical complexes — Alliance Global Logistics Hub in Fort Worth and Port San Antonio in San Antonio. Both provide easy access to interstate highways, Class-I rail systems, and airports. The airport at the Alliance Global Logistics Hub is the world’s first industrial-only airport. The hub is also a foreign-trade zone and includes BNSF Railway’s large intermodal facility, with direct access to multiple rail lines. Port San Antonio is a 1,900-acre industrial complex and international logistics center, built on the former Kelly Air Force Base. It too is a foreign-trade zone with easy access to three interstate highways and Union Pacific and BNSF rail lines. Port San Antonio provides more than logistical support — it also has an expanding aerospace presence. Fourteen aerospace-related companies with a combined 5,000 employees currently have facilities at Port San Antonio. In further support, Alamo Colleges has opened a new work force development and training center in the complex. Part of the 40,000-square-foot building will also serve as an incubator for start-up companies.
“This facility will benefit the residents and industries of the Alamo region and city of San Antonio, especially Port San Antonio tenants, by ensuring that Port San Antonio employers have access to a pool of skilled technicians to meet their expansion and retirement work force targets,” says Wayne Alexander, board chair of Port San Antonio.
Key Economic Drivers
Why do companies come to Texas? It’s pretty simple — a stable business climate, low taxes, outstanding transportation infrastructure, skilled work force, and one of the most pro-business state governments in the country. Consider that:
Next: Industry Clusters in Texas
- With no corporate income tax and no individual income tax, Texas has one of the lowest tax burdens in the country. According to www.taxfoundation.org, Texas ranks ninth for overall tax climate for the Fiscal Year 2013.
- Texas offers a highly skilled, well-educated work force of over 12 million people. The Texas Workforce Commission, through its Skills Development Fund, has awarded over $22 million in grants to improve worker skills.
- Transportation infrastructure in Texas consists of highly integrated networks of rail, highway, air, deepwater ports, and two master-planned logistics complexes that include Class-I rail terminals and direct access to interstate highways. Ten ports are designated as foreign-trade zones.
- The Texas Enterprise Fund (TEF) — established in 2003 to ensure the growth and success of key industries in Texas — has become one of the country’s most competitive state-level tools for attracting business and new investment. To date TEF has invested about $500 million to close deals on projects that have brought more than 67,000 new jobs and $20 billion in capital investment to the state.
“Texas has many economic attributes that put it on just about anybody’s short list,” says John Lenio, economist and managing director for CBRE’s Economic Incentives Group in Phoenix, Arizona. “After that, TEF can be highly effective in closing the deal. Other states would love to have an economic development tool like TEF. When conditions are right, TEF levels the playing field with other states, or tilts it in favor of Texas.”
“A key underlying factor in our economic success is that our communities also realize the importance of bringing good companies with great jobs to Texas,” says Aaron Demerson, executive director of Economic Development and Tourism for the Governor’s office. “It’s acting upon that knowledge that has brought industry leaders like Apple, Ericsson, and ExxonMobil to our metropolitan areas, and influenced growth in the rural Texas manufacturing and energy industries.”
Lenio agrees: “Texas communities place a very high value on jobs. They often roll out the red carpet, which makes a difference and is something visiting company officials notice and remember.”