Study Details Economic Impact of Conroe’s Business Growth
21 Mar 2017
Business projects supported by the Greater Conroe Economic Development Council (GCEDC) during 2013-2016 created nearly $400 million in capital investment and 703 direct jobs, according to a recent report from Impact DataSource, an economic consulting, research and analysis firm. The Impact DataSource report further stated that an additional 863 indirect jobs were created by the 14 projects the GCEDC recruited to Conroe, adding more than two indirectly related jobs for each direct job created by the projects the economic development organization attracted to the region.
Capital Investment and Jobs Created
In addition to the $398,848,410 in capital investment and combined 1,566 direct and indirect jobs created between 2013-2016, Conroe employment growth over the past dozen years outpaced job growth in Greater Houston and Texas by 16 and 20 percent, respectively. Conroe employment has grown from 27,181 in 2002 to 39,549 in 2014 – an increase of 46 percent over the 12-year period. Employment growth over the same period in Greater Houston was 30 percent and the state of Texas saw employment growth of 26 percent.
The jobs created during 2013-2016 are high-paying career opportunities, with average annual earnings eclipsing $56,000. Industries represented among the projects include manufacturing, oil and gas, telecommunications, and wholesale.
Impact DataSource was commissioned by the GCEDC to study the economic impact of 14 GCEDC business projects between 2013 and 2016. The Impact DataSource report estimates annual and cumulative economic and fiscal impacts that resulted from projects supported by the GCEDC. Indirect jobs created are jobs that support the direct jobs. These could be jobs that directly support the newly created jobs or indirectly service the people who fill the jobs, through retail services like clothing and grocery stores, restaurants, banking, real estate, etc.
The economic impact extends beyond job creation and salaries, according to Impact DataSource. When the studied projects are complete, nearly $293 million in taxable property is scheduled to be added. The taxable property will benefit the local taxing districts; City of Conroe, Montgomery County, Conroe Independent School District, Lone Star College District, and Montgomery County Hospital District. Conroe alone will see $2.8 million in new taxable income collected each year, a 47 percent return on the public investment for these new projects.
Growth in Conroe will result in an increase in demand for services from these taxing districts. The report accounted for additional costs and expenditures for public safety, infrastructure, and other services and still estimated the local taxing districts will receive an estimated $52.5 million in net benefits over the next 10 years.
Local Economic Output & Return on Incentive Investment
The estimated direct economic output added by the GCEDC recruited companies from 2013-2016 is nearly $144 million. The indirect economic output from these firms is approximately $90 million, leading to an overall economic output of roughly $234 million.
These values represent the inter-industry purchases from businesses within the area and the purchases by new workers in the area. Impact DataSource projects that the economic output could approach $600 million by 2025.
The GCEDC used incentive packages to secure many of the projects in the study. The sum of these incentives is approximately $5.9 million. Overall, when viewing the incentives offered to businesses from 2013 through 2016 as an investment and the additional tax revenue to local taxing districts as the return on the investment, the GCEDC is projected to generate a 47.4% average annual rate of return over 10 years.
According to the research on these projects, every $1 of public investment equals $76 in economic output, $15 in wages, $14 in local taxable sales, and $0.27 in local sales tax and $1.12 in property taxes.
The hard work of the Greater Conroe Economic Development Council, their partners, and the companies involved has led to sizable growth and a large fiscal impact in Conroe and Montgomery County. As Impact DataSource concluded in the report, “the creation of new taxes generated by EDC-assisted projects are examples of what a focused economic development effort can accomplish for the benefit of a community and such new taxes and other public revenues are significant.”
“The Greater Conroe Economic Development Council has attracted significant investment and growth over the last four years. This independent report validates the positive annual and cumulative economic and fiscal benefits of attracting new business to our region,” said GCEDC Executive Director, Fred Welch.
With plans for growth and expansion in 2017 and beyond, the GCEDC looks forward to further positive fiscal momentum and continuing to strengthen the Conroe economy. This economic growth will maintain Conroe as an outstanding place to live, work, learn, and play.
“The success highlighted in the report certainly motivates the GCEDC staff and board to achieve our goals of recruiting additional manufacturing, bioscience and technology companies to Conroe,” added Welch.
About Data Source
Impact DataSource is an Austin, Texas economic consulting, research, and analysis firm founded in 1993. The firm has conducted over 2,500 economic impact analyses of firms, projects, and activities in most industry groups in Texas and more than 30 other states.
In addition, Impact DataSource has prepared and customized more than 50 economic impact models for its clients to perform their own analyses of economic development projects.