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Automobile-Related Manufacturing NAICS 3361-3363 Overview
Subsector Snapshot | Printable (PDF)
Introduction
Auto-related industries and jobs are making important and growing economic contributions in Texas. The state’s favorable business climate and incentive programs have attracted automotive manufacturers and foreign investment.
Auto-related industries are highly advanced and spur innovation, exports and high-paying jobs. These industries have strengthened Texas’ economy, particularly following the 2008 recession; the state’s auto-related manufacturing GDP rose by an inflation-adjusted 450 percent from 2009 through 2015.
Fast Facts
- Automobile-related manufacturing provided about 38,850 direct jobs in 2016, as well as another 67,450 indirect jobs.
- The industries contributed $13.9 billion to the Texas GDP in 2015.
- Average annual wages were about $60,700 in 2016.
- Texas exports in automobile-related products were $13.7 billion in 2016, up from $9.2 billion in 2009.
Long-Term Employment Trends
Motor vehicle manufacturing is an emerging economic factor in Texas. Texas employment in motor vehicle manufacturing rose by 151 percent from 1990 through 2016, compared to a 23 percent decline in the U.S. (Exhibit 1).
Exhibit 1: Motor Vehicle Manufacturing, Percent Change in Employment, U.S. vs. Texas 1990-2016 (Indexed to 1990)
| Year | U.S. | Texas |
|---|---|---|
| 1990 | 0% | 0% |
| 1991 | -5% | 5% |
| 1992 | -4% | 7% |
| 1993 | -3% | 5% |
| 1994 | 4% | 42% |
| 1995 | 9% | 49% |
| 1996 | 5% | 35% |
| 1997 | 6% | 30% |
| 1998 | 4% | 26% |
| 1999 | 7% | 35% |
| 2000 | 7% | 40% |
| 2001 | 3% | 33% |
| 2002 | -2% | 44% |
| 2003 | -3% | 49% |
| 2004 | -6% | 65% |
| 2005 | -9% | 74% |
| 2006 | -13% | 112% |
| 2007 | -19% | 135% |
| 2008 | -29% | 144% |
| 2009 | -46% | 128% |
| 2010 | -44% | 142% |
| 2011 | -42% | 158% |
| 2012 | -38% | 165% |
| 2013 | -33% | 172% |
| 2014 | -29% | 174% |
| 2015 | -26% | 172% |
| 2016 | -23% | 151% |
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts
Exhibit 2: Automobile-Related Manufacturing Percent Change in Real GDP, U.S. vs. Texas 1997-2015 (Indexed to 1997)
| Year | U.S. | Texas |
|---|---|---|
| 1997 | 0% | 0% |
| 1998 | 11% | 16% |
| 1999 | 17% | 27% |
| 2000 | 20% | 49% |
| 2001 | 9% | 45% |
| 2002 | 24% | 51% |
| 2003 | 34% | 62% |
| 2004 | 38% | 33% |
| 2005 | 46% | 48% |
| 2006 | 60% | 112% |
| 2007 | 53% | 110% |
| 2008 | 20% | 86% |
| 2009 | -46% | -13% |
| 2010 | 12% | 100% |
| 2011 | 43% | 218% |
| 2012 | 55% | 246% |
| 2013 | 63% | 319% |
| 2014 | 69% | 344% |
| 2015 | 73% | 379% |
Sources: U.S. Bureau of Economic Analysis and Texas Comptroller of Public Accounts
Economic Output Trends
From 1997 through 2006, inflation-adjusted GDP contributions from automobile-related manufacturing industries rose by 380 percent in Texas, compared to 73 percent in the U.S. Since 2009, Texas industry GDP has averaged 33 percent annual growth (Exhibit 2).
Texas’ share of national GDP for auto-related industries rose from 3.1 percent in 1997 to 8.5 percent in 2015.
Industries in Automobile-Related Manufacturing
Employment in automobile-related manufacturing industries rose by 35 percent from 2010 through 2016, led by a 41 percent increase in motor vehicle parts manufacturing. Texas average wages for all auto-related manufacturing employment were about $60,700 in 2016. Average wages were highest among jobs in motor vehicle manufacturing, at more than $89,000.
All auto-related manufacturing industries are considered “advanced” as defined by the Brookings Institution — their research and development spending per worker ranks in the top 20 percent of industries and their share of workers with high levels of scientific and technical knowledge exceeds the national average.
The automobile-related manufacturing industries have a lower 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. Texas’ LQ value did rise from 0.37 in 2001 to 0.49 in 2016, indicating the industries are gaining strength in the state (Exhibit 3).
The share of auto-related employment in the Alamo and Upper East regions is higher than in the U.S. as a whole, indicating the presence of a regional “industry cluster.” These clusters are spurred by initiatives such as the Texas-Mexico Automotive Super Cluster region, which markets its workforce and location globally to increase automotive investments in Texas and four states in northern Mexico.Exhibit 3: Automobile-Related Manufacturing Industries
| Description | NAICS Code | 2016 Jobs | 2001 to 2010 % Change |
2010 to 2016 % Change |
2016 Average Salaries | 2001 Location Quotient | 2016 Location Quotient |
|---|---|---|---|---|---|---|---|
| Motor Vehicle Manufacturing | 3361 | 10,813 | 0.50% | 0.26% | $89,237 | 0.29 | 0.61 |
| Motor Vehicle Body and Trailer Manufacturing | 3362 | 8,059 | -0.22% | 0.33% | $44,305 | 0.67 | 0.64 |
| Motor Vehicle Parts Manufacturing | 3363 | 19,964 | -0.26% | 0.41% | $51,809 | 0.34 | 0.41 |
| Total | 38,836 | -0.11% | 0.35% | $60,672 | 0.37 | 0.49 |
Sources: Emsi and Texas Comptroller of Public Accounts
Industry Exports
Auto-related exports from Texas totaled $13.7 billion in 2016, up from $9.2 billion in 2009. Exports of motor vehicle body and trailers rose from $134 million to $1.1 billion in this period, accounting for 8 percent of all Texas auto-related exports in 2016 (Exhibit 4).
Exhibit 4: Texas Exports in Automobile-Related Manufacturing Industries
| Industry | Total Texas Exports | Share of Industry Exports | ||
|---|---|---|---|---|
| 2009 | 2016 | 2009 | 2016 | |
| Motor Vehicles | $3,232,582,487 | $3,210,750,626 | 35% | 23% |
| Motor Vehicle Body and Trailers | $134,419,890 | $1,114,736,844 | 1% | 8% |
| Motor Vehicle Parts | $5,858,908,542 | $9,372,437,919 | 64% | 68% |
| Total | $9,225,910,919 | $13,697,925,389 | ||
Conclusion
Automobile-related manufacturers face some challenges in Texas and the U.S.as a whole. Demand for motor vehicles fluctuates and is highly dependent on general economic conditions, consumer confidence, personal discretionary spending, interest rates and credit availability. And auto manufacturers are being forced to adapt to the increased popularity of ride-hailing services.
Despite such challenges, automobile manufacturing has buoyed recent gains in total manufacturing economic output and employment growth in Texas and nationwide.