This is a synopsis of the Perryman Report
Introduction: The HEDCO organization knows that targeted, proactive economic development efforts are crucial to success in the increasingly competitive environment for desirable corporate activity. In the Summer of 2020, HEDCO contracted with well known economist Dr. Ray Perryman and the Perryman Group to conduct a Socioeconomic Profile of the Henderson Area and Potential Target Industries. Following is a synopsis of the Perryman Group's report.
Note that this study was conducted in July-Sept 2020 during the Covid-19 pandemic.
Henderson, Texas is the county seat of Rusk County located in northeast Texas. It is roughly 20 miles south of Interstate 20 and approximately 50 miles west of the Texas-Louisiana border. The city is a major crossroads in northeast Texas and contains the intersection of US Route 259, US Route 79, Texas State Highway 64, and Texas State Highway 43 along with several Farm to Market (FM) roads.
Rusk County is a part of the Longview Metropolitan Statistical Area (MSA) along with Gregg and Upshur counties. The county is also located in the East Texas Workforce Development Area (WDA).
The largest industry for employment in Rusk County is government, followed by mining, which includes oil & gas and coal mining (which has declined significantly in recent years due to legislated reduction of coal mining), and health and social services. The county has a larger proportion of the workforce in agriculture and mining than the state. Overall, the area has a much heavier emphasis in goods-producing industries (32.7% of employment) versus the state (17.2% of employment).
Henderson ISD has three primary schools (divided between Preschool and Kindergarten, 1st to 3rd grades, and 4th and 5th grades), one middle school, and one high school, with a total district enrollment of 3,415 in the 2018-2019 school year. According to the latest ratings from the Texas Education Agency, the district received an overall rating of A for 2019, with, a B for student achievement, a B for academic growth, an A for school progress, and an A for closing the gaps. However, the ratings for the individual schools show room for improvement. The primary school, elementary schools, and the high school all have an accountability rating of B and the middle school has a rating of C.
Rusk County, in addition to Henderson ISD, also contains all or portions of the Carlisle, Cushing, Garrison, Kilgore, Laneville, Leveretts Chapel, Mount Enterprise, Overton, Rusk, Tatum, and West Rusk Independent School Districts.
There are multiple colleges and universities in the vicinity of Henderson, Texas, providing numerous opportunities for post-secondary education. The nearby institutions include:
• Angelina College in Lufkin, Texas;
• East Texas Baptist University in Marshall, Texas;
• Jacksonville College in Jacksonville, Texas;
• Jarvis Christian College in Hawkins, Texas;
• Kilgore College in Kilgore, Texas;
• LeTourneau University in Longview, Texas;
• Panola College in Carthage, Texas;
• Stephen F. Austin State University in Nacogdoches, Texas;
• Texas College in Tyler, Texas;
• Texas State Technical College, Marshall;
• Trinity Valley Community College in Athens and Palestine, Texas;
• Tyler Junior College in Tyler, Texas;
• University of Texas at Tyler in Tyler, Texas;
• University of Texas Health Science Center in Tyler, Texas; and
• Wiley College in Marshall, Texas.
Of those living in Henderson with a Bachelor’s Degree, the most common field is education, representing 31.9% of the total. The next most frequent field is business (24.3%), followed by science and engineering (22.4%). For the state, Bachelor’s Degrees are concentrated in science and engineering (34.8%). This information indicates that the workforce in Henderson is likely to have a different composition of skills than is typical for other areas of the state, particularly the large urban centers.
The largest industry for employment in Rusk County is government, followed by mining, and health and social services. The county has a larger proportion of the workforce in agriculture and mining than the state. Overall, the area has a much heavier emphasis in goods-producing industries (32.7% of employment) versus the state (17.2% of employment). According to data from the US Bureau of Labor Statistics, the Rusk County unemployment rate was 8.3% in September 2020, after improving to 6.8% in August after reaching 10.5% in May. Total employment for the county fell to 18,370 in April and stood at 20,644 in September. As with many parts of the nation, the economy has struggled as a result of the coronavirus pandemic. The recent volatility in the employment numbers is also a consequence of the disruptions stemming from the coronavirus.
Although the latest available workforce data at the city level is somewhat dated (2018), particularly given the pandemic, it nonetheless provides an indication of typical patterns. The 2018 unemployment rate in Henderson was 4.8% in 2018, below Texas at 5.4% and Rusk County at 6.2%. Note that the US Census Bureau only estimates unemployment for Henderson on a five-year basis, and comparable five-year estimates for Rusk County and Texas are provided. One-year estimates for Texas and Rusk County are available from the US Bureau of Labor Statistics and were 3.8% and 4.0%, respectively.
Target Industry Analysis
Target industry analysis involves a systematic and realistic evaluation to develop a list of industries which are the most viable for recruitment, allowing for enhanced efficiency and rate of return associated with investments in economic development. The analysis begins by identifying higher growth industries. While some relocations may occur, there is a significantly lower likelihood of success in stagnant or declining sectors. The list is then narrowed to include only industries which are a good fit for the community. In order to successfully recruit a new location or expansion, the community must meet the essential needs of firms in the industry. These needs often include workforce, location, proximity to suppliers/customers, raw materials, and infrastructure. The most successful efforts also involve communities building from strengths such as comparative advantages and existing industries.
It is important that target industry recruitment is focused on “primary” jobs and investments, meaning that they are supported by resources from other areas. Examples of industries providing such jobs include those manufacturing products sold in national or global market or providing services outside the local area. Tourism-related investments can also be effective if it is possible for an area to become a significant destination. In general, companies in industries that primarily serve the local area such as retail outlets, restaurants, and personal services establishments should not be targets, with destination retailers that expand the trade area being a notable exception.
Fast Growing Industries
As noted, one criteria for a potential target industry is future growth expectations. The Perryman Group has been producing forecasts for the state and the East Texas Region for decades. The latest projections from the firm’s US Multi-Regional Econometric Model were used to identify industries expected to grow significantly over the next several decades. The outlook for key primary industries (manufacturing and logistics) are described below.
Upper East Texas Region
The manufacturing industry group is projected to add almost 11,000 jobs in the Upper East Texas Region through 2045. Gains are forecast to be concentrated in machinery, transportation equipment, food, fabricated metal products, and chemicals.
Over 8,700 jobs are projected to be gained in Upper East Texas Regional transportation and warehousing industries.
East Texas Region
For the East Texas Region, 6,700 net new manufacturing jobs are forecast to be added through 2045. Machinery, transportation equipment, and food manufacturing industries are likely to experience the largest gains.
Almost 7,000 transportation and warehousing jobs are projected to be added through 2045.
Target Industry Types with Henderson Linkages
The Perryman Group performed a local and regional comparative analysis to determine industries where the area may have a competitive advantage. A comprehensive assessment of sectors benefitting from potential rail enhancements was also conducted. A strong presence in one industry increases the likelihood of attracting other businesses which may be suppliers or customers. Businesses which use common infrastructure or worker skillsets may also gravitate toward locations. Potential target industries were identified based on overall industry growth prospects and the degree to which Henderson and the East Texas Region represent advantageous locations.
The Perryman Group’s analysis of potential target industries identified the following types of industries as candidates for recruitment which could offer higher probabilities of success.
o Renewable Energy
o Agriculture/Food Processing including potential for tourism opportunities related to artisanal foods, wine, or spirits; (note that, given the large number of relatively small communities in the region, other tourism opportunities could potentially arise from venues for athletic tournaments of other similar events).
o Wood Products Manufacturing and Stone/Clay/Glass
o Transportation and the Potential for a Multi-Modal Logistics Hub
o Other Spin-off from Regional Industries (including Plastics, Fabricated Metals, Machinery, Electrical Equipment, and Biomedical)