The business of making things has been good lately in the Lone Star State. According to a new report from the Federal Reserve Bank of Dallas, Texas manufacturing is at a three-year high. That’s good news for the Texas economy, but what’s behind the uptick? And should we expect a slowdown?
Emily Kerr, a business economist at the Dallas Fed, says the state has weathered strong headwinds in an economic storm but indicators suggest that the recent boost is here to stay.
“We’ve seen a lot of positive signs that firms are back on their feet, that their production is growing, that they’re adding people to their payrolls and that they have positive expectations for the future as well,” Kerr says.
The report covers more than 100 manufacturers across the state.
To understand the driving forces behind this manufacturing upswing, Kerr points to two major challenges the state has recently overcome – the oil bust and the appreciating dollar during the recession.
“We’ve caught back up, which I think really is a testament to the resiliency and also to the diversity of the state economy,” Kerr says. “We’re not only tied to oil and we’re not only tied to agriculture. We have this broad economy now that has allowed us to weather that storm and get back on our feet.”
It’s reminiscent of ‘the Texas miracle,’ a period of time when the rest of the country was struggling but Texas manufacturing remained strong. Only this time, the boost seems to be nation-wide and experts are hopeful the changes are here to stay.
“We don’t have any expectations for things reversing course and falling negative. And also, manufacturing in general tends to be a leading indicator of the economy,” Kerr says. “When manufacturing is strong, that gives us a hopeful sign for the broader economy in general.
Written by Taylor Jackson Buchanan.