Once again Texas ranks as the number one state for corporate expansion by Site Selection Magazine. Texas is the 2016 Governor's Cup winner for the most qualified projects of any US state. Site Selection, published by Conway Inc., is the senior publication in the corporate real estate and economic development fields. This magazine has been in existence for over 63 years and has awarded the Governor's Cup annually since 1988. The focus is on new corporate facility projects, including headquarters, manufacturing plants, R&D operations and logistics sites. Site Selection defines a qualified project as one that meets one or more of the following criteria:
Involves a minimum of $1 million in capital investment
Creates 20 or more new jobs
Adds 20,000 square feet or more
What Gives Texas the Lead?
What gives Texas the lead is the quality of the work force. There is a great deal of talent in Texas! In 2016 the Lone Star State recorded over 640 qualified projects. What is significant is that Texas preserved its number one ranking even through the energy downturn. This is Texas' fifth consecutive Governor's Cup win since 2009. The Texas economy is more resilient than it has ever been; despite last year's oil crash, Texas stayed strong by adding over 200,000 new jobs.
How is it possible that we have more Texans with jobs today than ever before in our state's history? In Governor Greg Abbott's words, "The reason is we have continued to diversify our economy in areas and sectors that have nothing to do with energy. The high-tech sector is in high growth in Texas, and our healthcare sector and innovation in life sciences are growing very rapidly."
The Top Nine Industries Driving Texas' Economy
According to Forbes, the "$1.6 trillion Texas economy is the second biggest in the U.S., behind only California." Historically, four major business enterprises shaped the Texas economy prior to World War II: cattle and bison, cotton, timber, and oil. For the last century, Texas has been the home of energy. In 2017 the top nine industries driving the Texas economy are:
Trade, Transportation and Utilities - employing over $2 million people
Professional and Business Services - making up almost 14% of the Texas nonfarm workforce
Education and Health Services - with eight of the 25 largest employers in the state as hospitals or research facilities
Leisure and Hospitality - expanding due to growth in other sectors
Information Technology - with tech companies such as Dell, Texas Instruments, and Rackspace headquartered in Texas
Financial Services - representing large mature sectors
Manufacturing - employing over $800,000 people
Construction - one of the largest and fastest growing sectors in Texas
Energy - the tried and true
Economy Impacts Texas Real Estate
Local economy will always impact real estate. We all know that business can be competitive, but the biggest battles usually take place during the location and relocation process. The immense economic impact that each new employee brings to any given city in the US can be anything between $400,000 to $800,000 or more. What are local and state governments willing to offer to attract job creation and how does that impact the Texas real estate market? Incentives are a huge part of any organizations site selection process and they can range from tax credits to job training to export assistance.
Financial services in the Austin, TX and San Antonio, TX region is fast becoming a Central Texas secret weapon where capital investment is concerned. In August 2016, Charles Schwab Corporation unveiled plans to invest $100 million in a new, regional campus on 70 acres in Westlake that will include more than 500,000 sq. ft. of commercial space. At least 1,200 new jobs will be housed at the complex. Based on the math, this alone could infuse an additional $480 million to $1 billion into the San Antonio and surrounding area economy within the next 10 years. JB Goodwin REALTORS® are ready for that growth!