2017: The Best Year for Texas Manufacturing Despite Hurricane Harvey
As the month of September comes to a close, the Federal Reserve Bank of Dallas (Dallas Fed) released its monthly Texas Manufacturing Outlook Survey earlier this week. Even in the aftermath of Hurricane Harvey, September’s survey results were clear: the manufacturing industry in Texas is still going strong.
Industry executives throughout Texas contribute to the survey on the monthly basis, providing data for indicators such as employment, orders, prices, output, and so forth. Dallas Fed then calculates this data and releases an index for each indicator to reveal the health of the state’s economy. Any index below zero demonstrates a decrease while a score above zero means growth.
September’s production index was 19.5, a slight dip from 20.3 in August but nevertheless, highlights that the manufacturing sector is growing at a steady pace. In fact, September marks the 15th straight month that Texas witnessed production growth and this achievement continues the 2017 trend where every month had a growth rate above 11.9. Production growth levels in Texas are at the highest since before the recession in 2008.
Because of its connection to other sectors, manufacturing comprises an integral part of Texas’ economy. Other indicators of the Texas Outlook Survey show notable growth as well. For instance, the employment index was 16.3, the highest employment growth in almost three years. This was an increase from August’s 9.9. The U.S. Bureau of Labor Statistics states the unemployment rate is at a record low of 4.4%, maintaining manufacturing as one of the key hiring sectors. The general business activity index in September was 21.3, a rise from August’s 17. The new orders index this month was 18.6, compared to 14.3 in August. This overall growth in Texas is in stark contrast to the Chicago Fed National Activity Index (CFNAI) which measures the health of national economic activity and had reported a significant decrease in most production indicators.
If you are among these manufacturing companies engaging in R&D and contributing to growth in the state of Texas, you may be eligible for the R&D Tax Credit. If you would like to find out how your company could benefit from R&D Tax Credits, please contact a Swanson Reed R&D Specialist today.
Swanson Reed regularly hosts free webinars and provides free IRS CE credits as well as CPE credits for CPA’s. For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.