Sales tax revenue from two of Conroe’s most important business sectors has started to rebound from a downturn that started in 2014.
A rebound in the manufacturing and building material sectors has given city officials reason to be optimistic about Conroe’s economic growth in the near future, Mayor Toby Powell said. Sales tax revenue makes up 44.9 percent of all general fund revenues in Conroe, and reported a downturn in sales tax from the two sectors since early 2015.
“We are financially healthy,” Powell said. “These sales tax revenues are the largest aspect of our budget. It is exciting, it really is.”
Conroe Chief Financial Officer Steve Williams said the oil and gas downturn primarily affected manufacturing businesses throughout Conroe and in the Conroe Park North industrial park.
“The price of oil decreased, so that was reflected in the amount of production that a lot of our large industrial companies had,” Williams said. “They produce things for the oil and gas business—whether it’s pipes or drill bits or whatever—that are subject to sales tax.”
The decline in manufacturing also affected the sale of building materials, Williams said. As employment in the manufacturing and oil and gas sectors slowed, less homes needed to be built because of reduced demand.
While stability in other sectors such as food service, general merchandise and wholesalers acted as a buoy for the Conroe sales tax revenue during that time period, the decline reached its lowest point in late 2016, Williams said.
Since then the city has maintained an upward trend in those manufacturing and building material sectors. During the city’s Feb. 22 meeting, Williams reported Conroe generated more $32.3 million in sales tax in 2017, compared to $31.2 million in 2016.
“Seeing this turn around really gives you a good indication that the industrial park is starting to hire again [and]they are starting to sell again,” Williams said.
Powell said incoming developments such as Woodlands Hills and the continued growth of Grand Central Park are expected to contribute heavily to the economic growth of the region.
“We are going to continue to grow,” Powell said. “[GCP] is moving in the right direction with the commercial tracts, and when Woodlands Hills starts their town center area, they are going to be a boost to our economy. We have so much happening.”