Skip to main content

Houston Manufacturers: Positive Environment Will Help Expand Local Operations

Published Nov 06, 2019 by A.J. Mistretta

Rich Wells, chair of the Partnership's Manufacturing and Logistics committee

Major manufacturers in Houston are bullish on their expansion plans in the region, which could help bolster Houston’s identity as a hub for various segments of the industry. 

That was one of the main discussion points at the Greater Houston Partnership’s Manufacturing Industry Forum on November 6. Mike Molnar, Founding Director of the Office of Advanced Manufacturing at the National Institute of Standards and Technology, gave the keynote address, providing an overview of the national manufacturing landscape.  

The Houston region is home to more than 6,400 manufacturers that produce more than $82 billion in products annually. The industry employs more than 230,000 workers and helps drive Houston’s substantial export economy. 

The Partnership’s Manufacturing and Logistics Committee is working to target prospective global manufacturers for expansion or relocation to the Houston region. Led by chair Rich Wells, Vice President of U.S. Gulf Coast Operations at The Dow Chemical Company, the committee recently surveyed a subset of 10 companies with significant manufacturing operations in the Houston area to get their perspective on operating here. Together, those companies employ 25,000 local workers, or about 10% of Houston’s manufacturing employment base.

Seven of the 10 companies surveyed said they plan to expand their Houston area operations in the next three years. Those collective expansions could mean 3,400 new jobs and $5.2 billion in capital expenditures. Most of the companies surveyed said their primary customers were in international markets and that they expect demand to increase in the near term. 

When asked about the perceived strengths of the region to support their operations, the surveyed companies cited the concentration of STEM talent, significant transportation infrastructure, low-cost of doing business and access to global markets. 

“As a committee, we were pleased to see that these results align with the way we are already promoting Houston as a manufacturing city,” said Wells. 

The companies also cited several specific challenges to operating in Houston, including the threat of natural disasters, poor air quality and poor-quality K-12 schools, among other issues. Wells said the Partnership is working through its various initiatives to tackle each of those challenges. 

“We will take the results of this survey and sharpen our work and tighten our pitch to the companies we are working to attract,” Wells said.

In his presentation, Molnar stressed the important role the manufacturing sector plays in the nation’s economy. Approximately 10% of U.S. jobs are tied directly to manufacturing, and it’s in that sector where the vast majority of research and development still happens. 

Molnar said that despite the oft-repeated idea that most manufacturing happens overseas in countries such as China, the U.S. still leads the world in manufacturing advanced technology products.

“The U.S. is making more stuff than ever before in our history,” he said. “The golden age of manufacturing is now.” 

Texas is the only state that is exporting more manufactured goods than it’s producing, meaning goods manufactured elsewhere in the country, or even abroad, are passing through the state’s ports to be exported to customers overseas. Molnar said that illustrates the critical role Texas plays in the global supply chain.  

Certainly, with Houston’s central geographic location relative to the U.S. and to the Americas broadly, along with our numerous logistical and distribution channels, the region is an ideal hub for manufacturing companies that need to reach customers around the world, said Partnership President and CEO Bob Harvey. 

Harvey pointed out that the manufacturing industry is in the midst of a transformation, leveraging and developing new digital technologies, including artificial intelligence, industrial internet of things, and additive manufacturing, among others. These changes are apparent at some of Houston’s largest manufacturing companies as well as in the innovation sphere at places like maker space TXRX in East Downtown and TMCx, an accelerator for cutting-edge medical device manufacturing at the Texas Medical Center’s Innovation Institute

“The exciting work happening in our region positions us well as a competitive place to attract and grow cutting-edge manufacturing companies,” Harvey said. 

Learn more about manufacturing in Houston and local industry data. Also view Mike Molnar's presentation
 

Related News

Economic Development

Houston's Role in Global Energy Transition a Major Focus of Greater Houston Partnership Annual Meeting

1/23/20
HOUSTON (January 22, 2020) - Greater Houston Partnership 2020 Board Chair Bobby Tudor outlined how the organization will work to ensure Houston plays a key role in the global energy transition at the Partnership’s annual meeting on January 22.  Read the remarks from Bobby Tudor and Bob Harvey and see Bobby Tudor's slide presentation. Watch the full meeting below.  Maintaining Houston’s place as the Energy Capital of the World requires that the region’s business and civic leaders address the dual challenge of meeting expanding global energy demand while lowering the world’s carbon footprint, said Tudor, Chairman of Tudor, Pickering, Holt & Co. LLC, an energy investment and advisory firm.  “The economic vitality and growth of our region’s economy is inextricably tied to the energy industry,” Tudor said, adding that the Partnership and its members “should use our convening power to rally our companies, political leaders and fellow citizens to position Houston as the city that will lead this energy transition.” The Partnership will launch a new initiative aimed at accelerating Houston’s activity around energy transition, while existing committees will continue efforts to bring energy tech and renewable energy companies to Houston; explore the policy dimensions of carbon capture, use, and storage; and advocate for legislation that helps ensure the Texas Gulf Coast is positioned as a leader in that technology.  Houston business leaders have a responsibility to lead the transition to a cleaner, more efficient and more sustainable, lower carbon world, Tudor said. “We need to be the driver, not the passenger.”  Highlighting some of the changes and milestones reached in Houston over the last decade*, Partnership President and CEO Bob Harvey said that while the last 10 years were transformational for Houston, the next decade may be to be even more critical to the region’s long-term success. “I believe the decisions we make and the work we do together in the next few years will determine the trajectory of Houston for the next several decades and beyond,” Harvey said.  2019 Key Accomplishments  The Partnership’s 2019 Board Chair, Scott McClelland, said he was pleased with the organization’s successful efforts on major initiatives last year. Through its public policy committees, the Partnership influenced key bills during the 86th Texas Legislative Session, including House Bill 3 that brought $5 billion in new state funding into the public education system and Senate Bill 7 that resulted in $2 billion in state funding for statewide recovery and future flood mitigation.  “If there’s one big thing I learned over the last year, it’s that the key to making this city better for everyone is having a lot of Houstonians involved in the effort,” said McClelland, president of H-E-B. “There’s power in numbers. It’s a force multiplier.”  Harvey also pointed to Houston’s recent success in bolstering its innovation ecosystem—a move critical to the region’s ability to compete with other global cities. Last summer, Rice University broke ground on The Ion, a 270,000-square-foot innovation center that will anchor the broader 16-acre South Main Innovation District. Other startup incubators and accelerators have opened their doors throughout the city in recent months, including MassChallenge, The Cannon, Gener8tor, Plug and Play and more. The Partnership also played a role in fintech company Bill.com opening its first office outside of Silicon Valley here in Houston in September.  In January 2019, the Partnership launched a new strategic initiative, Houston Next, and a complementary $50 million capital campaign to support the effort. Designed to advance Houston’s position as a great global city, the plan focuses on three core areas: creating a strong, diverse 21st-century economy, ensuring a great quality of life and supporting opportunity for all. Houston Next aims to empower local business leaders to accelerate the region’s progress at the intersection of those three areas of impact and ensure Houston’s continued success. Harvey said the Partnership is well underway toward meeting its Houston Next objectives and reported that the campaign has raised $25 million, half of its goal.  See the Partnership’s full 2019 Annual Report for additional facts and figures. *The last decade was one of the most transformative in Houston’s history. Consider:  •    The region added more than 1.1 million residents over the last 10 years an increase of more than 18 percent.  •    Houston became the most diverse city in the nation, now led by its Hispanic population and the fastest growing Asian population in America.  •    The Houston region added $64 billion to its GDP, a 17 percent increase in real terms.  •    Foreign trade expanded by nearly $24 billion, making Houston the most trade focused metropolitan area in the nation.  •    Houston added 615,000 net new jobs over the last decade.  ### Greater Houston Partnership  The Greater Houston Partnership works to make Houston one of the best places to live, work and build a business. As the economic development organization for the Houston region, the Partnership champions growth across 11 counties by bringing together business and civic-minded leaders who are dedicated to the area’s long-term success. Representing 1,100 member organizations and approximately one-fifth of the region’s workforce, the Partnership is the place business leaders come together to make an impact. Learn more at Houston.org. CONTACT:         Maggie Martin      Senior Manager, Marketing & Communications      (o) 713-844-3640 mmartin@houston.org      A.J. Mistretta     Vice President, Communications              (o) 713-844-3664 (c) 504-450-3516 | amistretta@houston.org       
Read More
Airports

Houston's Hobby Airport Starts 2020 With New Airline, Maintenance Facility

1/15/20
Houston's William P. Hobby Airport is marking the start of the new year with a couple of big announcements. Earlier this week, Allegiant announced it added Houston as one of a few cities it’ll begin serving in 2020. According to its press release, the new seasonal nonstop routes from Hobby Airport include Knoxville, TN, Asheville, NC, Savannah, GA, and Destin/Fort Walton Beach, FL. Allegiant says it’s also expanding to Boston and Chicago. It’s the largest expansion in the airline’s 23-year history, driven by the company’s focus on leisure travel. Allegiant’s announcement comes just days after Southwest Airlines unveiled a $125 million, 240,000-square-foot maintenance facility at Hobby. It’s the largest in the Dallas-based carrier’s network, and includes offices, training facilities and warehouse space. “It’s proof of our devotion and our dedication to Houston,” Southwest CEO Gary Kelly said during the grand opening celebration, as reported by the Houston Chronicle. “And the opportunity that we see here, and the excitement that we have to continue to grow.” Kelly told reporters that Houston is one of three key cities where Southwest is focused on adding flights over the next 10 years, according to the Houston Business Journal. Southwest’s CEO said he ultimately wants to connect Houston to South America. “I don’t see that in the next year or so, but definitely down the road it’s something that we would be interested to do,” Kelly said. Houston is the international air gateway to the South Central U.S. and Latin America. With the addition of international air service at Hobby Airport in ’15, Houston became the only city in Texas with two airports offering international service and one of only eight such cities nationwide. According to Houston Facts, domestic travel at Hobby Airport increased by more than 7% to over 13 million passengers in ’18. Airlines that offer direct domestic flights from Hobby include American Airlines, Delta Airlines, JetBlue Airways and Southwest Airlines. Southwest is currently the only airline out of Hobby offering direct international flights. The Partnership's 2019 Economic Highlights report says the Houston Airport System (HAS) offers nonstop flights to some 190 domestic and international destinations in 37 countries. Hobby is ranked as the 35th busiest airport in the nation.  Learn more about air transportation in Houston in Houston Facts. Read how Hobby performed last year in the 2019 Economic Highlights report and get a monthly aviation update. 
Read More

Related Events

Digital Technology

Innovation Council

For Houston to continue moving forward as a great global city, we must further the innovation eco-system in order to attract tech and start-up companies. This council examines how the greater Houston region can…

Learn More
Learn More
Executive Partners