Fabricated Metal Products ManufacturingNAICS 332 Overview

Subsector Snapshot | Printable (PDF)

Fast Facts

Fabricated metal product manufacturing provided about 118,000 direct jobs in 2016, as well as another 68,700 indirect jobs.
The subsector’s GDP totaled $14.0 billion in 2015.
Average annual wages in the subsector averaged about $59,000 in 2016.
Subsector exports were more than $7.7 billion in 2016.

Introduction

Fabricated metal product manufacturing is the largest manufacturing subsector in Texas in terms of employment, accounting for 14.0 percent of Texas’ manufacturing jobs in 2016. The subsector's share in the U.S., by comparison, was 11.5 percent. This subsector uses purchased metal shapes and further fabricates them into intermediate or end-use products. The processes employed include shaping individual pieces of metal (through forging, stamping, bending and forming) and joining separate parts together (through welding, machining and assembly).

Demand for fabricated metal products is driven by local and regional requirements and other industrial needs. Compared to other manufacturing subsectors, fabricated metal production is more labor intensive. For instance, labor compensation accounted for 65 percent of the value added in this subsector, compared to 46 percent for all manufacturing activity. The economic fortunes of the subsector are linked to overall economic growth and, particularly in Texas, the energy sector.

Long-Term Employment Trends

Texas’ fabricated metal product subsector employment rose 26 percent during the 1990s. Job counts rose and fell during the 2000s, tracking the national economic recessionary periods and economic expansions. Most recently, Texas’ job count fell, coinciding with a decline in oil prices. Overall, subsector employment levels in Texas are 19 percent above 1990 levels. By contrast, the U.S. subsector is down by 12 percent (Exhibit 1).

Recent Employment Trends

This subsector suffered job losses in Texas beginning in January 2015, coinciding with declining energy prices. Recently, however, its employment has begun to recover, adding about 14,000 jobs from December 2016 to December 2017 (Exhibit 2).

Subsector Economic Output Trends

Texas’ inflation-adjusted GDP in the fabricated metal product subsector rose by 29 percent from 1997 to 2015. During this period, the U.S. subsector GDP declined by 11 percent (Exhibit 3).

Exhibit 1: Fabricated Metal Product Manufacturing, Percent Change in Employment,
U.S. vs. Texas, 1990-2016 (Indexed to 1990)

Year	United States	Texas
1990	0%	0%
1991	-4%	2%
1992	-7%	-2%
1993	-6%	-1%
1994	-3%	4%
1995	1%	10%
1996	2%	15%
1997	5%	21%
1998	8%	25%
1999	7%	23%
2000	9%	26%
2001	4%	23%
2002	-4%	14%
2003	-8%	6%
2004	-7%	7%
2005	-5%	14%
2006	-4%	25%
2007	-3%	31%
2008	-5%	35%
2009	-19%	18%
2010	-20%	13%
2011	-16%	22%
2012	-12%	34%
2013	-11%	37%
2014	-10%	43%
2015	-9%	35%
2016	-12%	19%

Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts

Exhibit 2: Fabricated Metal Products Manufacturing
Monthly Employment Levels, January 2010 to June 2017

Year-Month	Jobs
2010-Jan	109,700
2010-Feb	109,600
2010-Mar	110,100
2010-Apr	110,400
2010-May	111,100
2010-Jun	111,800
2010-Jul	112,600
2010-Aug	113,300
2010-Sep	113,300
2010-Oct	114,800
2010-Nov	115,400
2010-Dec	116,100
2011-Jan	115,500
2011-Feb	116,800
2011-Mar	117,800
2011-Apr	119,200
2011-May	119,800
2011-Jun	121,700
2011-Jul	123,200
2011-Aug	124,200
2011-Sep	125,700
2011-Oct	126,200
2011-Nov	126,500
2011-Dec	127,300
2012-Jan	128,000
2012-Feb	129,400
2012-Mar	130,900
2012-Apr	131,500
2012-May	132,400
2012-Jun	133,800
2012-Jul	134,500
2012-Aug	135,300
2012-Sep	135,400
2012-Oct	135,400
2012-Nov	135,300
2012-Dec	135,100
2013-Jan	134,500
2013-Feb	135,500
2013-Mar	135,800
2013-Apr	135,500
2013-May	135,400
2013-Jun	136,200
2013-Jul	136,500
2013-Aug	136,800
2013-Sep	136,800
2013-Oct	137,000
2013-Nov	137,900
2013-Dec	138,100
2014-Jan	138,000
2014-Feb	139,300
2014-Mar	139,800
2014-Apr	140,400
2014-May	141,200
2014-Jun	142,300
2014-Jul	143,100
2014-Aug	144,100
2014-Sep	144,600
2014-Oct	145,200
2014-Nov	145,900
2014-Dec	146,600
2015-Jan	144,900
2015-Feb	142,800
2015-Mar	141,000
2015-Apr	138,400
2015-May	136,600
2015-Jun	135,400
2015-Jul	133,100
2015-Aug	131,300
2015-Sep	130,000
2015-Oct	127,800
2015-Nov	126,200
2015-Dec	125,500
2016-Jan	123,700
2016-Feb	122,800
2016-Mar	121,800
2016-Apr	119,200
2016-May	118,300
2016-Jun	117,700
2016-Jul	116,700
2016-Aug	116,300
2016-Sep	115,800
2016-Oct	117,000
2016-Nov	116,700
2016-Dec	118,300
2017-Jan	120,800
2017-Feb	123,300
2017-Mar	125,200
2017-Apr	126,500
2017-May	127,900
2017-Jun	129,000
2017-Jul	129,100
2017-Aug	131,500
2017-Sep	132,800
2017-Oct	133,500
2017-Nov	134,700
2017-Dec	132,300

Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts

Exhibit 3: Fabricated Metal Products Manufacturing, Percent Change in Real GDP, U.S. vs. Texas, 1997-2015 (Indexed to 1997)

Year	U.S.	Texas
1997	0.0%	0.0%
1998	-2.4%	3.8%
1999	-1.7%	-5.4%
2000	4.4%	5.5%
2001	-6.9%	3.2%
2002	-11.2%	-2.3%
2003	-7.7%	-5.5%
2004	-4.0%	-3.4%
2005	-2.1%	12.7%
2006	1.6%	28.7%
2007	5.5%	46.1%
2008	-0.5%	42.0%
2009	-24.1%	6.8%
2010	-16.8%	12.2%
2011	-11.5%	34.3%
2012	-8.7%	48.2%
2013	-9.3%	43.3%
2014	-6.3%	52.7%
2015	-11.0%	29.3%

Sources: U.S. Bureau of Economic Analysis and Texas Comptroller of Public Accounts

Industry Concentration in Texas

Several industries in this subsector have a higher share of employment in Texas than nationally, as gauged by location quotient (LQ), a measure of employment concentration in a given area: the higher the LQ value, the more “concentrated” the industry.

The architectural and structural metals industry has the highest LQ at 1.40, meaning the industry’s share of total employment is 40 percent higher in Texas than the U.S. Such levels of employment concentration can indicate a regional “industry cluster,” a group of interrelated firms in an area that provide related products or services and share similar needs for workers and suppliers. Other industries with a high concentration in Texas include boiler, tank and shipping container manufacturing and other fabricated metals, such as fabricated pipe fittings.

Overall, Texas’ fabricated metal product manufacturing subsector LQ was 1.00 in 2016, meaning that its share of the subsector’s employment is equal in Texas to the U.S. (Exhibit 4).

Exhibit 4: Fabricated Metal Products Manufacturing in Texas: Industries

Description	NAICS Code	2016 Jobs	2001 to 2010 % Change	2010 to 2016 % Change	2016 Average Salaries	2001 Location Quotient	2016 Location Quotient
Forging and Stamping	3321	4,001	-17%	-9%	$64,989	0.59	0.50
Cutlery and Handtool Manufacturing	3322	1,279	-16%	-5%	$50,503	0.31	0.41
Architectural and Structural Metals Manufacturing	3323	42,806	-19%	8%	$54,171	1.61	1.40
Boiler, Tank and Shipping Container Manufacturing	3324	9,617	-1%	17%	$65,234	1.12	1.27
Hardware Manufacturing	3325	1,014	9%	10%	$53,256	0.25	0.49
Spring and Wire Product Manufacturing	3326	2,971	-34%	-7%	$51,902	0.89	0.84
Machine Shops; Turned Product; and Screw, Nut and Bolt Manufacturing	3327	20,767	9%	-2%	$53,516	0.78	0.71
Coating, Engraving, Heat Treating and Allied Activities	3328	9,863	5%	1%	$51,988	0.78	0.87
Other Fabricated Metal Product Manufacturing	3329	25,742	-3%	9%	$70,801	1.06	1.15
Total Fabricated Metal Product Manufacturing	332	118,060	-9%	5%	$58,662	1.02	1.00

Conclusion

The fabricated metal product subsector is more labor intensive compared to other manufacturing processes, and it represents Texas’ largest manufacturing subsector in terms of employment. The subsector experienced an employment recovery in 2017 following two years of job losses, which were largely due to falling energy prices.

The subsector is concentrated in several regions across Texas, especially in the Southeast, Gulf Coast and Upper East regions, and in cities like Longview, Beaumont-Port Arthur and Houston.