Several companies eyeing the Greater Waco market would need a combined 1 million square feet of usable space, meaning they would build new facilities or expand existing ones, Kris Collins, the Greater Waco Chamber of Commerce’s industry recruiter, told contractors during a presentation Thursday.
Already this year, Waco has seen companies fill 597,000 square feet of space and create 390 new jobs, Collins said during a joint meeting of the Construction Financial Management Association and the local chapter of the Associated General Contractors of America at Hotel Indigo.
Collins said Waco’s economy remains robust, spawning $1.4 billion in spending on industrial and commercial development since 2006, a figure that does not include the $260 million price of Baylor University’s McLane Stadium or investments in downtown Waco.
In that period, 45 new companies have arrived, and 73 existing companies have expanded, Collins said.
“McLennan County is outpacing the region, the state and the United States in job creation,” Collins said.
The county added 4,050 jobs during the 12 months through June.
Longtime Baylor economist Tom Kelly, who retired last month, said the Waco Metropolitan Statistical Area, which includes McLennan and Falls counties, continues to enjoy jobless rates of less than 4.0 percent, which translates to full employment. Unemployment numbers that low can aggravate labor shortages, leaving employers in a lurch and potentially short-circuiting the momentum business and industry are enjoying, Kelly said.
Looking at the jobless rate alone does not show the full picture companies looking for a home consider, Collins said.
“I’m not overly concerned because, though our jobless rate remains low, our workforce is growing. That’s the narrative I share with employers,” she said.
Employers should also keep in mind almost 800 soldiers are discharged from Fort Hood each month, Collins said.
“Most want to stay in Central Texas,” Collins said.
Collins said manufacturing remains strong in Greater Waco, with 14 percent of the local workforce employed in that sector compared to 5 percent in Temple and Killeen. To keep the industry purring, local leaders created the Greater Waco Advanced Manufacturing Academy, with classes in construction science, electronics and robotics, precision metal and manufacturing, Collins said.
Still, Collins said she often hears complaints about staffing challenges.
Rod Smith, Johnson Roofing’s chief financial officer, said Thursday the company was forced to launch its own training program.
“We’re having to go out and find people,” Smith said.
Kelly said Waco’s healthy housing market and demand for new homes is contributing to the shortage, as available labor is dwindling. He said policies that discourage migration from Mexico also play a role.
An economics professor at Baylor University since 1969, Kelly said for years students would discuss job opportunities in Dallas and Houston.
“Now they want to know about opportunities in Central Texas,” he said. “They consider the congestion in Texas’ larger cities, the quality of life locally. The real GDP (gross domestic product) along the Central Texas corridor, which includes Waco, Temple, Killeen and Austin, has been growing at a 3 to 8.1 percent pace, while U.S. metro areas as a whole are at 1.7 percent.”
Nationally, Kelly said he sees the GDP slowing this year from last.
“It doesn’t mean we’re going into recession,” he said. “It means we’re probably getting all we can out of the available workforce.”
Collins said Texas is projected to see its population double within 30 years, with growth concentrated in the “Texas Triangle,” which stretches along much of I-35 between Dallas-Fort Worth, San Antonio and Houston. The Waco area is taking steps to deal with this growth, Collins said.
It has 11 business parks sporting 15,000 acres, three airports, port accessibility three hours away and a seven-county labor force.
Waco city leaders have implemented a $320 million, 10-year infrastructure upgrade, while McLennan County has earmarked another $30 million, she said.
“If everything goes as planned, every street in Waco will be redone within 10 years,” Collins said. “Spending on streets will grow to $25 million annually.”
Waco also has a handful of other factors going in its favor, including a cost of living 11 percent less than the national average, Collins said during her presentation.
“We have very reasonable grocery prices, and H-E-B contributes mightily to that,” she said.
Waco’s average apartment rental rate is $987 a month, and it has become a “destination city,” attracting 2.2 million visitors last year, primarily thanks to “Fixer Upper” stars Chip and Joanna Gaines’ Magnolia Market at the Silos.
“Before, we were trending at about 600,000 (visitors) a year,” Collins said.