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Are Texas Manufacturing Jobs Being Drawn to Smaller Metros?

Between San Antonio and Austin, what is the fastest growing city in the nation? The answer is, quite literally, located between San Antonio and Austin. It’s San Marcos, Texas. Part of this exceptional growth comes with manufacturing jobs relocating to this historically quaint town.

“The San Marcos area is growing in a number of industries, including manufacturing, thanks in large part to our affordability coupled with rich talent, connected infrastructure and high quality of life,” explains Adriana Cruz, president of the Greater San Marcos Partnership.

San Marcos isn’t the only relatively small community that is gaining manufacturing jobs quickly. Several factors contribute to this potential talent migration from larger metros to smaller metros. First of all, employees want and can afford to live in these smaller communities. This is certainly the case Cruz states for San Marcos’ rise in popularity among employers.

“Here you can find the cachet of Austin without the cost,” she says, adding, “As Austin continues to become more expensive in terms of cost of living and increased traffic, we’re going to continue to see companies locate in the surrounding areas, closer to where their employees live.”

Cruz explains that she and her colleagues are just now beginning to see the potential the San Marcos region holds for burgeoning businesses and industries.

“I expect to see a fruitful and healthy economy here locally for years to come. Companies like Amazon, EPIC Piping, and Fashion Glass & Mirror are choosing to place their facilities in San Marcos and the surrounding communities in Hays and Caldwell counties, and I think that trend will continue,” she adds.

What’s more, it appears the State of Texas is supporting this trend as well.

“Just last week the Texas Workforce Commission announced they would be awarding Austin Community College a 1.7 million dollar grant to offer specialized training for 554 EPIC Piping employees, transforming San Marcos and our region into a Center of Excellence for advanced welding,” Cruz says. According to recent statistics, Texas holds the most jobs for welders, nearly double the amount employed in any other state. “It’s this kind of progress that has me positive about the future of manufacturing jobs in the region.”

In fact, employment trends don’t seem to favor larger metros much at all.  New York, Seattle, San Francisco, Los Angeles and Washington, D.C. are all in the process of raising minimum wages to $15 an hour. Chicago and San Diego are raising required wages as well. While Texas cities are not in this mix and workers in the restaurant/food service industry are most affected, this shift certainly weighs on the minds of employers considering where to plant their manufacturing plants.

However, there are businesses bucking these trends. A recent study by Smart Growth America identified the characteristics of nearly 500 companies nationwide who chose to move operations into a major metro from 2010 to 2015. Nearly half of those companies relocated from a suburban location (either within the same metro area or from a different region). The group represented more than 170 specific industries, including 45 manufacturers. The companies made the moves for several main reasons:

  • To attract and retain talented workers.
  • To build brand identity and company culture.
  • To support creative collaboration.
  • To be closer to customers and business partners.
  • To centralize operations.
  • To support triple-bottom line business outcomes.

Austin-based YETI Coolers moved its facilities from Driftwood, Texas, to East Austin in 2011 and now has corporate offices just a stone’s throw from downtown in Southwest Austin. Other manufacturers have moved from the suburbs to the major metros as well. Some thanks, in part, to initiatives like the City of Austin’s [re]Manufacturing Hub, which is meant to attract recycling and reuse companies with affordable real estate in a zoned community, permitted and outfitted with utility infrastructure specific to the industry.

Are you in the manufacturing industry, and what are your thoughts on the perceived migration of these jobs to outlier towns? As an employer, where do you stand? Does the future of Texas’ manufacturing jobs reside in city centers, or does it reside elsewhere, in the smaller communities? Let us know what you think!

Image Courtesy of the Greater San Marcos Partnership