The Future of Manufacturing in Texas: Good or Bad?

Texas has recently been lauded for its top manufacturing jobs, but analysts have also reported a decline in production.

By Brenda SalinasJune 8, 2015 7:15 am|

Last month, analysts reported a manufacturing decline in Texas. Simultaneously, Houston and Dallas were named some of nation’s highest manufacturing job hubs. The San Antonio Manufacturers Association has also formed a new workforce development initiative to prepare more young people for careers in manufacturing. So what’s going on this side of the business sector? Akin Oyedele, a markets reporter at Business Insider, joins the Texas Standard to help us balance out the contradictory information.

The good news:

“There are careers in manufacturing in the first place, and that’s actually growing. The fact that there’s job creation in manufacturing is a positive sign, especially at a time when there’s a bit of a slowdown in job creation overall in the economy.”

The bad news:

“In April, one measure of manufacturing in Texas that’s very closely watched and followed fell to the lowest level in about seven years, and that’s the Dallas Federal Reserve Manufacturing Survey. The survey basically just takes a pulse of various business leaders in all types of industries. Not only did this index drop, but it came in worse than economists expected and we’ve seen quite a sustained slide in the index throughout this year…. there seems to be sort of a slowdown in the actual output in manufacturing.”

On the contradictory reports: 

“It seemed like manufacturing was advancing at a steady pace until the oil crash reared its ugly head and so lots of manufacturers had to slow down their output…. anyone who depends on any subsector of the energy or the oil and gas industry for their products – whether they are transporters that move oil through rail or just anyone remotely connected to the oil sector – has had some form of impact. and of course the oil sector itself.”

Oyedele says it’s a strong possibility that manufacturers would stand to gain if oil prices rebound, because they’ll be manufacturing more pipelines and drilling equipment. But, he says, it’s still yet to be seen.

“Oil prices have rebounded a bit and in the Dallas Federal Reserve Survey some manufacturers said that they’ve seen sort of the rise in prices spill over into their business, but they’re still quite cautiously optimistic.”