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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

economy

Manufacturing in the Capital Region

The Capital Region of Texas includes 10 counties and stretches from Llano to San Marcos and from La Grange to Georgetown. The region encompasses the Austin-Round Rock-Georgetown Metropolitan Statistical Area (MSA), which includes Bastrop, Caldwell, Hays, Travis and Williamson counties. It also includes Blanco, Burnet, Fayette, Llano and Lee counties.

In 2019, the Capital Region had an estimated population of 2.4 million (nearly 8 percent of the state total) and accounted for 8.8 percent of the state’s total employment.

The region included more than 65,000 manufacturing jobs in 2019, about 6 percent of its total employment of more than 1.1 million. That the sector’s contribution to regional gross domestic product (GDP) and total wages was much larger, however, is a testament to the region’s high-value manufacturing production. The manufacturing sector’s regional GDP of $18.9 billion accounted for 11.5 percent of the total regional GDP of $164.8 billion. The Capital Region’s manufacturers paid more than $6.9 billion in wages in 2019, or nearly 10 percent of total regional wages of $71.7 billion. Annual wages for its manufacturing jobs averaged nearly $107,000 in 2019, compared to average wages of about $65,000 for all regional jobs.

In 2019, manufacturing activity in the region had the greatest effect on Williamson County, contributing 17.8 percent of the county’s total wages and 17.2 percent of its total GDP, results that far exceeded the regional averages. The county’s manufacturing jobs also had by far the highest average wages, at about $141,500 (Exhibit 1).

The region’s manufacturers include some of the world’s most innovative technology firms, including Samsung Austin Semiconductor, Apple, Dell Technologies, Oracle and many more. Its manufacturing sector — particularly its computer, electronics and semiconductor industries — is buoyed by an educated and skilled workforce and partnerships with research institutions including the University of Texas.

Exhibit 1: Manufacturing Overview by County, Capital Region, 2019

County Employment Gross Domestic Product Wages
Total Share Total
(millions)
Share Total
(millions)
Share Average
Annual Wages
Bastrop 1,175 6.3% $183 7.8% $61 8.0% $52,011
Blanco 338 9.9% $40 10.2% $16 9.2% $45,921
Burnet 1,012 6.8% $204 12.0% $62 9.4% $60,823
Caldwell 631 7.1% $41 4.4% $26 7.6% $41,404
Fayette 925 10.0% $85 5.4% $37 9.3% $39,518
Hays 4,907 6.7% $718 9.7% $292 9.6% $59,479
Lee 454 5.7% $51 5.3% $25 5.8% $55,943
Llano 158 3.3% $22 2.9% $8 4.4% $52,365
Travis 41,350 5.3% $13,526 10.8% $4,412 8.1% $106,707
Williamson 14,093 7.8% $4,037 17.2% $1,994 17.8% $141,462
Capital Region Total 65,043 5.9% $18,908 11.5% $6,932 9.7% $106,581
Texas 908,801 7.2% $241,000 13.1% $72,473 9.6% $79,746

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

Long-Term Regional Trends

Between 2001 and 2019, manufacturing employment in the Capital Region fell by about 18 percent or nearly 14,000 jobs. Manufacturing’s share of total regional employment fell from 11.4 percent to 5.9 percent in this period (Exhibit 2).

Exhibit 2: Manufacturing Employment and Manufacturing Share of Total Employment, 2001 to 2019, Capital Region

Manufacturing Employment and Manufacturing Share of Total Employment, 2001 to 2019, Capital Region
Year Total Industry Jobs Manufacturing Jobs Manufacturing Share of Total Industry Jobs
2001 695,274 78,989 11.4%
2002 681,164 65,687 9.6%
2003 675,636 60,770 9.0%
2004 687,503 59,860 8.7%
2005 720,492 59,739 8.3%
2006 751,194 61,352 8.2%
2007 788,202 62,823 8.0%
2008 802,758 61,038 7.6%
2009 781,042 51,368 6.6%
2010 791,415 49,890 6.3%
2011 816,312 52,159 6.4%
2012 847,392 53,437 6.3%
2013 880,901 54,901 6.2%
2014 918,721 60,072 6.5%
2015 960,421 60,672 6.3%
2016 990,874 57,994 5.9%
2017 1,022,982 59,922 5.9%
2018 1,059,786 63,224 6.0%
2019 1,102,735 65,043 5.9%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The region recovered some manufacturing jobs between 2009 and 2019, adding nearly 13,700 jobs for a 26.6 percent increase. By comparison, Texas and U.S. manufacturing jobs rose by 8.0 percent and 8.2 percent, respectively (Exhibit 3).

Exhibit 3: Percentage Change in Manufacturing Jobs, 2009 to 2019 (Indexed to 2009)

Total Manufacturing Jobs, 2009-2019 (Indexed to 2009)
Year Capital Region Jobs Capital Region Percent Change Texas Jobs Texas Percent Change USA Jobs USA Percent Change
2009 51,368 0.0% 841,353 0.0% 11,854,159 0.0%
2010 49,890 -2.9% 814,265 -3.2% 11,532,264 -2.7%
2011 52,159 1.5% 840,195 -0.1% 11,748,311 -0.9%
2012 53,437 4.0% 867,771 3.1% 11,950,974 0.8%
2013 54,901 6.9% 877,534 4.3% 12,040,273 1.6%
2014 60,072 16.9% 890,468 5.8% 12,202,119 2.9%
2015 60,672 18.1% 881,291 4.7% 12,339,571 4.1%
2016 57,994 12.9% 848,235 0.8% 12,345,948 4.1%
2017 59,922 16.7% 854,385 1.5% 12,456,179 5.1%
2018 63,224 23.1% 882,339 4.9% 12,696,998 7.1%
2019 65,043 26.6% 908,801 8.0% 12,828,307 8.2%

Sources: JobsEQ and Texas Comptroller of Public Accounts

Between 2009 and 2019, the Capital Region added 455 manufacturing establishments, a 29 percent increase, compared to gains of 9 percent in Texas and 1 percent in the U.S. (Exhibit 4).

Exhibit 4: Total Manufacturing Establishments in Capital Region, 2009 to 2019

Total Manufacturing Establishments in Capital Region, 2009 to 2019
Year Capital Region (total) Capital Region Texas USA
2009 1,568 0.0% 0.0% 0.0%
2010 1,544 -1.5% -1.4% -2.5%
2011 1,585 1.1% -1.6% -4.0%
2012 1,612 2.8% -1.9% -4.7%
2013 1,622 3.4% -2.0% -4.7%
2014 1,656 5.6% -1.4% -3.9%
2015 1,702 8.5% 0.4% -3.0%
2016 1,786 13.9% 1.7% -2.2%
2017 1,873 19.5% 3.8% -1.3%
2018 1,955 24.7% 5.7% 0.0%
2019 2,025 29.1% 9.4% 1.1%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The region’s manufacturing jobs paid average wages of $106,581 in 2019, far exceeding the Texas and U.S. averages. Between 2009 and 2019, its average wages rose by 38 percent, versus 32 percent in Texas and 27 percent in the U.S. (Exhibit 5).

Exhibit 5: Average Wages in Manufacturing Jobs, 2009 to 2019

Average Annual Wages, Manufacturing Jobs, 2009-2019
Year Capital Region Texas USA
2009 $77,316 $60,401 $54,939
2010 $83,733 $63,310 $57,595
2011 $87,926 $66,075 $59,277
2012 $88,759 $68,491 $60,553
2013 $87,802 $68,838 $61,143
2014 $89,950 $71,171 $63,024
2015 $95,933 $72,815 $64,352
2016 $92,941 $73,125 $64,922
2017 $96,519 $75,806 $66,898
2018 $97,523 $77,647 $68,585
2019 $106,581 $79,746 $69,976

Sources: JobsEQ and Texas Comptroller of Public Accounts

The manufacturing sector’s GDP value for the Capital Region rose by an inflation-adjusted 62.6 percent between 2009 and 2019, for an average annual increase of 5 percent. The sector’s average annual GDP changes in Texas and the U.S., by comparison, were 2.6 percent and 1.9 percent, respectively (Exhibit 6).

Exhibit 6: Percentage Change in Real Gross Domestic Product, Manufacturing, 2009 to 2019 (Indexed to 2009)

Percentage Change in Real Gross Domestic Product, Manufacturing, 2009 to 2019 (Indexed to 2009)
Year Capital Region Texas USA
2009 0.0% 0.0% 0.0%
2010 16.9% 10.8% 5.4%
2011 20.6% 15.0% 5.8%
2012 6.8% 10.9% 5.1%
2013 12.9% 23.3% 8.3%
2014 13.8% 11.3% 10.2%
2015 30.4% 15.0% 11.7%
2016 34.0% 11.7% 10.9%
2017 46.1% 18.2% 13.7%
2018 50.2% 24.4% 18.5%
2019 62.6% 29.7% 20.8%
2009-2019 5.0% 2.6% 1.9%

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

Pandemic Effects

All Texas industry sectors have been affected by the pandemic to some degree, and manufacturing is no exception. Monthly jobs data show that manufacturing jobs in the Austin-Round Rock-Georgetown metropolitan area fell by 900 (or -1.4 percent) in February 2021 compared to the previous year. This fall is less than manufacturing job declines in Texas (-6.0 percent) and the U.S. (-4.1 percent) in this period (Exhibit 7).

Exhibit 7: Changes in Manufacturing Jobs, February 2020 to February 2021

Metro Area Manufacturing Jobs Percent Change (Manufacturing) Percent Change (Total Employment)
Austin-Round Rock-Georgetown MSA -900 -1.4% -3.0%
Texas -54,200 -6.0.% -4.6%
United States -524,000 -4.1% -6.0%

Source: Texas Workforce Commission
Note: Not seasonally adjusted

Key Manufacturing Industries

The interactive exhibit (Exhibit 8) reveals regional manufacturing industry strengths and weaknesses through the use of two common analytical tools that compare regional manufacturing employment trends to national averages. These tools serve as an educational resource to assess industry strengths and inform development prospects.

First, the location quotient (LQ) measures state and regional industry concentration levels by comparing an industry’s share of total regional employment to its share of total national employment. If the regional industry share exceeds the national share (an LQ greater than 1.00), the industry is more “concentrated” in the region than nationally. A score above 1.00 may indicate that the regional industry is strong and self-sufficient and that it exports its products or services outside of the region. Regional industries with below-average employment concentrations (LQs of less than 1.00) often import goods or services from other areas.   

A second tool, shift-share analysis (SSA), measures regional industry job changes and assesses the role of local competitiveness on industry job gains or losses. The SSA uses national employment and industry trends to produce expected employment changes for a regional industry. If a regional industry’s actual employment changes exceed expected changes (a positive local competitiveness effect), the region may have a productive advantage in the industry. Between 2009 and 2019, SSA shows that manufacturing employment in the Capital Region exceeded expected changes by more than 12,000 jobs.

The Capital Region’s manufacturing industries plotted in the exhibit fall into one of four quadrants based on 2019 LQ values and SSA values between 2009 and 2019:

  • Strong and growing: Industry has above-average concentration levels (2019 LQ value > 1.00) and industry job changes exceeded expected changes between 2009 and 2019 (positive competitiveness effect);
  • Strong but declining: Industry has above-average concentration levels (2019 LQ value > 1.00) and industry job changes fell below expected changes between 2009 and 2019 (negative competitiveness effect);
  • Weak but growing: Industry has below-average concentration levels (2019 LQ value < 1.00) and industry job changes exceeded expected changes between 2009 and 2019  (positive competitiveness effect); and
  • Weak and declining: Industry has below-average concentration levels (2019 LQ value < 1.00) and industry job changes fell below expected changes between 2009 and 2019 (negative competitiveness effect).

While manufacturing isn’t highly concentrated in the Capital Region (2019 LQ = 0.68), it has competitive factors that allowed manufacturing employment to flourish; regional manufacturing jobs exceeded expected changes by more than 12,000 jobs between 2009 and 2019.

The region’s computer and electronic products industry is its most heavily concentrated manufacturing industry, with an LQ value of 3.5. (In other words, the industry’s share of Capital Region employment is 3.5 times as high as the industry’s nationwide share.) The industry was also one of the region’s most competitive, as employment exceeded expected gains by more than 5,400 jobs.

The computer industry is highly important to the region and the state — its 28,026 jobs in 2019 accounted for 43 percent of the Capital Region’s total manufacturing employment and 66 percent of its total manufacturing wages. The region also is home to 30 percent of the industry’s total Texas employment.  

The levels of employment concentration for many of the region’s manufacturing industries remain below national averages, yet several show high levels of competitiveness, including medical equipment and food and beverage manufacturing. Such developments could identify emerging industries and prospects for further growth.    

A note of caution: A positive competitive effect indicates that some economic advantages exist in a region, such as access to natural resources or access to a more productive labor pool, management or technologies. A positive competitive effect indicates some economic advantages exist but cannot identify the source of that advantage.

Exhibit 8: Manufacturing Industries in the Capital Region, Concentration Levels and Competitiveness

Manufacturing Industries in the Capital Region, Concentration Levels and Competitiveness
Industry Title NAICS Employment, 2019 Location Quotient, 2019 Employment Changes due to Local Competitiveness, 2009-2019
Food Manufacturing 311 3,693 0.3 1,114
Beverage and Tobacco Product Manufacturing 312 2,320 1.08 1,321
Textile Mills 313 71 0.09 43
Textile Product Mills 314 208 0.25 104
Apparel Manufacturing 315 147 0.18 58
Leather and Allied Product Manufacturing 316 147 0.72 139
Wood Product Manufacturing 321 828 0.27 -352
Paper Manufacturing 322 263 0.1 166
Printing and Related Support Activities 323 2,013 0.63 25
Petroleum and Coal Products Manufacturing 324 179 0.21 106
Chemical Manufacturing (Resource-Intensive Commodities) 3251-3253 301 0.14 76
Pharmaceutical and Medicine Manufacturing 3254 2,114 0.92 84
Chemical Manufacturing (Locally Processed Goods) 3255-3259 722 0.37 381
Plastics and Rubber Products Manufacturing 326 2,031 0.37 582
Nonmetallic Mineral Product Manufacturing 327 3,107 1 246
Primary Metal Manufacturing 331 525 0.18 -20
Fabricated Metal Product Manufacturing 332 4,599 0.41 696
Machinery Manufacturing 333 4,727 0.56 62
Computer and Electronic Product Manufacturing 334 28,026 3.48 5,442
Electrical Equipment, Appliance and Component Manufacturing 335 3,012 1 1,129
Motor Vehicle, Body and Parts Manufacturing 3361-3363 636 0.09 184
Aerospace Product and Parts Manufacturing 3364 890 0.22 231
Other Transportation Equipment Manufacturing 3365-3369 65 0.04 58
Furniture and Related Product Manufacturing 337 1,622 0.56 215
Medical Equipment and Supplies Manufacturing 3391 1,409 0.58 486
Other Miscellaneous Manufacturing 3399 1,387 0.63 -461
Total – Manufacturing 65,043 0.68 12,115

Sources: JobsEQ and Texas Comptroller of Public Accounts

Summary

Manufacturing employment in the Capital Region rose by nearly 27 percent between 2009 and 2019, greatly outpacing state and national growth. In the Austin-Round Rock-Georgetown MSA, manufacturing fell during the COVID-19 restrictions of 2020, but the drop was less than declines in Texas overall and in the U.S.

Regional manufacturing is led by computer and semiconductor manufacturing, an industry that invests heavily in design activities and research and development. Such activity boosts jobs in other industries, particularly related service providers. Regional employment in the computer systems design and related services industry, for example, rose by 26,154 jobs between 2009 and 2019, a 184 percent increase.

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