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Wood Product ManufacturingNAICS 321 Overview
Subsector Snapshot | Printable (PDF)
Introduction
This subsector includes sawmills and wood preservation services; plywood, hardwood and truss manufacturers; and manufacturers of windows, doors, flooring, wood containers and mobile homes.
Fast Facts
- Wood product manufacturing provided about 23,000 direct Texas jobs in 2016.
- The subsector’s gross state product (GSP) totaled $1.4 billion in 2015.
- Its annual wages averaged about $41,000 in 2016.
- Subsector exports from Texas were valued at $358 million in 2016.
Long-Term Employment Trends
Employment in Texas’ wood product manufacturing subsector rises during economic expansions and falls precipitously during downturns. Texas subsector employment rose by 53 percent in the 1990s, peaking at 35,500 jobs in 1999. Employment fell sharply during the last recession but has recovered steadily since then, rising by 29 percent from 2011 through 2017. In all, 2017 subsector employment in Texas was 4 percent higher than in 1990; the U.S. subsector job count, by contrast, was 27 percent lower (Exhibit 1).
Subsector Economic Output Trends
Texas’ inflation-adjusted GSP in wood product manufacturing declined by 13 percent from 1997 to 2015. In the same period, U.S. subsector output fell by 9 percent (Exhibit 2).
Exhibit 1: Wood Product Manufacturing, Percent Change in Employment, U.S. vs. Texas 1990 to 2017 (Indexed to 1990)
| Year | U.S. | Texas |
|---|---|---|
| 1990 | 0.0% | 0.0% |
| 1991 | -7.8% | -7.8% |
| 1992 | -7.2% | -3.0% |
| 1993 | -3.1% | 9.1% |
| 1994 | 3.7% | 19.0% |
| 1995 | 6.1% | 27.6% |
| 1996 | 7.8% | 35.3% |
| 1997 | 10.1% | 39.2% |
| 1998 | 12.6% | 46.6% |
| 1999 | 14.7% | 53.0% |
| 2000 | 13.3% | 47.0% |
| 2001 | 6.1% | 34.1% |
| 2002 | 2.6% | 25.9% |
| 2003 | -0.6% | 14.2% |
| 2004 | 1.6% | 16.8% |
| 2005 | 3.3% | 17.7% |
| 2006 | 3.2% | 22.0% |
| 2007 | -4.8% | 16.8% |
| 2008 | -15.7% | 7.8% |
| 2009 | -33.7% | -9.9% |
| 2010 | -37.0% | -16.4% |
| 2011 | -37.9% | -19.4% |
| 2012 | -37.6% | -16.8% |
| 2013 | -35.0% | -13.4% |
| 2014 | -31.6% | -8.2% |
| 2015 | -29.6% | -4.7% |
| 2016 | -27.7% | -0.4% |
| 2017 | -26.9% | 3.9% |
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts
Exhibit 2: Wood Product Manufacturing, Percent Change in Real GDP, U.S. vs. Texas, 1997 to 2015 (Indexed to 1997)
| Year | U.S. | Texas |
|---|---|---|
| 1997 | 0% | 0% |
| 1998 | 1% | 15% |
| 1999 | 0% | 13% |
| 2000 | 2% | 11% |
| 2001 | -2% | 1% |
| 2002 | -1% | 7% |
| 2003 | -1% | 4% |
| 2004 | -2% | -5% |
| 2005 | 6% | -2% |
| 2006 | 4% | 2% |
| 2007 | 9% | 12% |
| 2008 | 0% | 9% |
| 2009 | -16% | 6% |
| 2010 | -13% | -8% |
| 2011 | -5% | 3% |
| 2012 | -5% | 11% |
| 2013 | -8% | 1% |
| 2014 | -16% | -11% |
| 2015 | -9% | -13% |
Sources: U.S. Bureau of Economic Analysis and Texas Comptroller of Public Accounts
Subsector and Industry Concentration in Texas
One method to measure a subsector’s regional strength is the location quotient (LQ), a ratio of the subsector’s share of employment in a region to its share of employment in the U.S. as a whole; the higher the LQ value, the more “concentrated” the industry. LQ values often are used to identify regional strengths and inform economic development and investment decisions.
A high LQ can identify a regional industry that enjoys a competitive advantage compared to other regions; an LQ below 1.00 can indicate competitive weakness. A regional LQ of at least 1.25 (meaning the subsector’s regional share of total employment is 25 percent greater than in the U.S.) can indicate an exporting subsector and the presence of a regional “industry cluster,” a group of interrelated firms providing related products or services and sharing similar needs for workers and suppliers.
Texas’ statewide 0.71 LQ in wood product manufacturing indicates that the subsector and its industries are not highly competitive (Exhibit 3). A regional assessment of employment concentration is useful, however, as the size of Texas’ economy and workforce can obscure regional industry strengths. The wood product manufacturing subsector is highly concentrated in the Southeast and Upper East Texas regions and has an above-average employment concentration in Central Texas (Exhibit 4).
Exhibit 3: Wood Product Manufacturing in Texas: Industries
| Industries | NAICS | 2016 Jobs | 2010 to 2016 % Change |
2016 Average Wages |
2016 Location Quotient |
|---|---|---|---|---|---|
| Wood Product Manufacturing | 312 | 23,038 | 17.80% | $41,025 | 0.71 |
| Sawmills and Wood Preservation | 3211 | 3,527 | 9.20% | $44,021 | 0.47 |
| Veneer, Plywood and Engineered Wood Product Manufacturing | 3212 | 4,815 | 34.70% | $49,106 | 0.76 |
| Other Wood Product Manufacturing | 3219 | 14,696 | 15.20% | $37,658 | 0.79 |
Source: Emsi and Texas Comptroller of Public Accounts
Exhibit 4: Wood Product LQ and Employment by Region, 2016
| Region | 2016 Location Quotient |
2016 Jobs |
|---|---|---|
| Southeast | 5.17 | 3,757 |
| Upper East | 2.94 | 3,369 |
| Central | 1.23 | 1,603 |
| Metroplex | 0.71 | 6,717 |
| Alamo | 0.6 | 1,830 |
| Gulf Coast | 0.45 | 3,555 |
| West | 0.45 | 325 |
| Upper Rio Grande | 0.37 | 335 |
| Northwest | 0.36 | 211 |
| Capital | 0.31 | 821 |
| High Plains | 0.27 | 278 |
| South | 0.1 | 211 |
| Texas | 0.71 | 23,038 |
Source: Emsi and Texas Comptroller of Public Accounts
Conclusion
Manufacturing continues to drive output and productivity in the Texas economy, creating jobs paying well above the statewide average. It also contributes significantly to job creation in other industries, particularly in design operations and services.
Wood product subsector employment rose by 18 percent in Texas from 2010 through 2016, buoyed by demand from residential construction and housing starts. The subsector will continue to face competition from imports and from material substitutes such as rubber, plastics and steel.