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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 Upper East Region

The Upper East Region includes 23 counties in the northeast corner of Texas, stretching from the Arkansas and Louisiana borders on the east to Cedar Creek Reservoir in the west.

The Upper East region includes three metropolitan statistical areas (MSAs): the Longview MSA, comprising Gregg, Rusk and Upshur counties; the Texarkana MSA, which comprises Bowie County, and the Tyler MSA, comprising Smith County. The region’s economic core is centered in the city of Tyler in Smith County.

In 2019, the Upper East Region had an estimated total population of about 1.2 million, about 4 percent of the total Texas population, and accounted for nearly 3.4 percent of the state’s total employment.

The region included more than 50,700 manufacturing jobs in 2019, about 12 percent of its total employment of more than 427,000. The sector’s contribution to regional gross domestic product (GDP) and total wages was much larger, however, in a testament to the region’s high-value manufacturing production. The manufacturing sector’s regional GDP of $8.6 billion accounted for 17 percent of the total regional GDP of $50.8 billion. The Upper East Region’s manufacturers paid more than $2.7 billion in wages in 2019, or 14.5 percent of total regional wages of $18.9 billion. Annual wages for its manufacturing jobs averaged $54,135 in 2019, versus average wages of $44,344 for all regional jobs.

In 2019, manufacturing activity had a particularly significant effect on Morris County, contributing 57.9 percent of the county’s total wages and 53.9 percent of its total GDP, results far exceeding regional averages. The county’s manufacturing jobs also paid the region’s highest average wages in the sector, at about $73,366 (Exhibit 1).

Exhibit 1: Manufacturing Overview by County, Upper East Region, 2019

County Employment Gross Domestic Product Wages
Total Share Total
(millions)
Share Total
(millions)
Share Average
Annual Wages
Anderson 1,557 7.6% $212 10.0% $73.3 7.8% $47,052
Bowie 2,018 4.8% $243 6.2% $95.9 5.6% $47,494
Camp 154 4.0% (D) (D) $4.7 3.1% $30,237
Cass 1,359 17.3% $219 24.7% $89.6 30.2% $65,972
Cherokee 2,396 16.2% $214 14.3% $97.9 17.8% $40,855
Delta 16 1.5% (D)(D) $0.5 1.8% $31,103
Franklin 112 3.5% (D) (D) $3.5 2.5% $31,034
Gregg 8,030 10.5% $1,080 13.3% $484.1 13.1% $60,283
Harrison 5,789 25.2% $2,105 43.4% $384.8 32.6% $66,470
Henderson 2,407 13.7% $230 12.1% $106.1 15.8% $44,087
Hopkins 1,852 14.3% $205 12.9% $95.4 18.4% $51,516
Lamar 5,374 24.5% $1,051 36.0% $312.3 32.6% $58,109
Marion 351 17.6% $71 23.4% $21.6 31.6% $61,740
Morris 1,573 41.5% $359 53.9% $115.4 57.9% $73,366
Panola 1,040 12.4% $106 5.1% $47.8 11.5% $45,985
Rains 102 5.0% $12 5.2% $3.8 5.5% $37,428
Red River 468 17.5% $39 12.6% $16.1 16.6% $34,471
Rusk 1,438 10.6% $220 8.5% $65.6 10.7% $45,602
Smith 6,421 6.1% $980 8.7% $338.7 6.9% $52,750
Titus 5,630 35.0% $794 40.0% $253.7 41.2% $45,069
Upshur 372 5.1% $45 5.1% $17.5 6.1% $47,158
Van Zandt 1,022 9.0% $248 19.1% $55.8 13.5% $54,580
Wood 1,266 12.2% $214 14.3% $63.1 15.7% $49,806
Upper East Region Total 50,748 11.9% $8,645 17.0% $2,747 14.5% $54,135
Texas 908,801 7.2% $241,005 13.1% $72,473 9.6% $79,746

(D): data not shown to avoid disclosure of confidential information.

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

The Upper East Region is home to a variety of educational programs that train the workforce in advanced manufacturing. Longview’s East Texas Advanced Manufacturing Academy partners with Kilgore College to provide a 16-week course on precision machining technology or instrumentation and electrical technology. It also serves as a training center for local industry and an adult education center for retraining.

Several of the region’s community colleges also provide degree or certificate programs in advanced manufacturing. Texarkana College, for example, offers an Industrial Maintenance/Multi-Craft Certificate program that trains students in six different trades and prepares them for a wide range of jobs including industrial machinery mechanic. Texarkana College estimates median pay for industrial machinery mechanics at $62,310 and projects job opportunities will rise by 16 percent in the next 10 years.

Long-Term Regional Trends

Between 2001 and 2019, manufacturing employment in the Upper East Region fell by 13.4 percent or more than 7,800 jobs. Manufacturing’s share of total regional employment fell from 15.7 percent to 11.9 percent in this period (Exhibit 2).

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

Manufacturing Employment and Manufacturing Share of Total Employment, 2001 to 2019, Upper East Region
Year Total Industry Jobs Manufacturing Jobs Manufacturing Share of Total Industry Jobs
2001 374,120 58,569 15.7%
2002 374,437 55,838 14.9%
2003 375,145 54,841 14.6%
2004 380,350 55,377 14.6%
2005 388,854 55,816 14.4%
2006 397,088 57,062 14.4%
2007 407,187 56,681 13.9%
2008 413,393 55,338 13.4%
2009 398,561 46,562 11.7%
2010 398,620 44,341 11.1%
2011 404,288 45,304 11.2%
2012 408,424 44,556 10.9%
2013 411,753 44,825 10.9%
2014 416,813 47,444 11.4%
2015 418,574 48,068 11.5%
2016 417,310 47,278 11.3%
2017 416,591 46,944 11.3%
2018 421,346 48,787 11.6%
2019 427,235 50,748 11.9%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The region recovered some manufacturing jobs between 2009 and 2019, adding nearly 4,200 jobs, a 9 percent increase. By comparison, Texas and U.S. manufacturing jobs rose by 8 percent and 8.2 percent, respectively (Exhibit 3). The region’s manufacturing employment rose sharply between 2017 and 2019, led by gains in food manufacturing, fabricated metals and transportation equipment.

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

Total Manufacturing Jobs, 2009-2019 (Indexed to 2009)
Year Upper East Region Jobs Upper East Region Percent Change Texas Jobs Texas Percent Change USA Jobs USA Percent Change
2009 46,562 0.0% 841,353 0.0% 11,854,159 0.0%
2010 44,341 -4.8% 814,265 -3.2% 11,532,264 -2.7%
2011 45,304 -2.7% 840,195 -0.1% 11,748,311 -0.9%
2012 44,556 -4.3% 867,771 3.1% 11,950,974 0.8%
2013 44,825 -3.7% 877,534 4.3% 12,040,273 1.6%
2014 47,444 1.9% 890,468 5.8% 12,202,119 2.9%
2015 48,068 3.2% 881,291 4.7% 12,339,571 4.1%
2016 47,278 1.5% 848,235 0.8% 12,345,948 4.1%
2017 46,944 0.8% 854,385 1.5% 12,456,179 5.1%
2018 48,787 4.8% 882,339 4.9% 12,696,998 7.1%
2019 50,748 9.0% 908,801 8.0% 12,828,307 8.2%

Sources: JobsEQ and Texas Comptroller of Public Accounts

Between 2009 and 2019, the Upper East Region lost 13 manufacturing establishments, a 1.1 percent decrease, compared to gains of 9.4 percent in Texas and 1.1 percent in the U.S. (Exhibit 4).

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

Total Manufacturing Establishments in Upper East Region, 2009 to 2019
Year Upper East Region (total) Upper East Region Texas USA
2009 1,207 0.0% 0.0% 0.0%
2010 1,174 -2.7% -1.4% -2.5%
2011 1,173 -2.8% -1.6% -4.0%
2012 1,167 -3.3% -1.9% -4.7%
2013 1,159 -4.0% -2.0% -4.7%
2014 1,144 -5.2% -1.4% -3.9%
2015 1,152 -4.6% 0.4% -3.0%
2016 1,173 -2.8% 1.7% -2.2%
2017 1,195 -1.0% 3.8% -1.3%
2018 1,191 -1.3% 5.7% 0.0%
2019 1,194 -1.1% 9.4% 1.1%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The region’s manufacturing jobs paid average wages of $54,135 in 2019, less than the Texas and U.S. averages. Between 2009 and 2019, its average wages rose by 24.2 percent, versus 32 percent in Texas and 27.4 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 Upper East Region Texas USA
2009 $43,578 $60,401 $54,939
2010 $45,404 $63,310 $57,595
2011 $47,501 $66,075 $59,277
2012 $50,068 $68,491 $60,553
2013 $51,591 $68,838 $61,143
2014 $52,237 $71,171 $63,024
2015 $51,814 $72,815 $64,352
2016 $50,541 $73,125 $64,922
2017 $52,043 $75,806 $66,898
2018 $53,990 $77,647 $68,585
2019 $54,135 $79,746 $69,976

Sources: JobsEQ and Texas Comptroller of Public Accounts

The manufacturing sector’s GDP value for the Upper East Region decreased by an inflation-adjusted 3.2 percent between 2009 and 2019, for an average annual decrease of 0.3 percent. In Texas and the U.S., by comparison, the sector’s average annual GDP rose by 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 Upper East Region Texas USA
2009 0.0% 0.0% 0.0%
2010 -10.7% 10.8% 5.4%
2011 -12.8% 15.0% 5.8%
2012 -16.3% 10.9% 5.1%
2013 -13.4% 23.3% 8.3%
2014 -19.9% 11.3% 10.2%
2015 -18.8% 15.0% 11.7%
2016 -16.1% 11.7% 10.9%
2017 -13.1% 18.2% 13.7%
2018 -6.4% 24.4% 18.5%
2019 -3.2% 29.7% 20.8%

Note: Due to GDP data withheld to avoid disclosure of confidential information, the analysis excludes the Upper East Region counties of Camp, Delta and Franklin.

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 employment in the Longview metropolitan area was 600 positions or 6.3 percent lower in February 2021 than in the same month of the previous year. In the Tyler metropolitan area, however, manufacturing employment rose by 200 positions or 2.9 percent. Manufacturing employment also declined in Texas (-6.0 percent) and the U.S. (-4.1 percent) during 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)
Longview -600 -6.3% -6.8%
Texarkana -100 -1.8% -4.2%
Tyler 200 2.9% -2.6%
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 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 beyond 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. Conversely, a negative competitiveness effect indicates that the industry fell short of expected employment changes.
 
Notably, an industry’s competitive effect value does not always follow its total employment changes. For example, an industry could gain jobs but still have a negative competitiveness value if the region fails to meet employment expectations. Between 2009 and 2019, total regional manufacturing rose by 9.0 percent (4,186 jobs), but SSA shows the region fell short of expected manufacturing gains by more than 824 jobs.

The Upper East 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).

Manufacturing is heavily concentrated in the Upper East Region. Its LQ in 2019 was 1.32, meaning its share of regional employment was about 32 percent higher than the sector’s nationwide share. A wide variety of manufacturing industries had an above-average presence in the region in 2019, including food, transportation equipment, wood products, paper, chemicals, petroleum products, machinery and primary and fabricated metals. Several of these industries are closely tied to the region’s strong energy and mining sector.

Among these core industries, several surpassed employment expectations between 2009 and 2019 according to SSA calculations, led by food manufacturing, paper, furniture products, fabricated metals and railroad rolling stock. Machinery manufacturing jobs, however, fell by 2,249 jobs or 33 percent during this period. This loss occurred in the region despite industry gains in Texas and the U.S. SSA calculations show the regional industry fell short of employment expectations by 3,012 jobs.

Some regional industries with below-average concentrations (notably beverage products and pharmaceutical and medicine manufacturing) did exceed employment expectations. Such developments could identify emerging industries and prospects for further growth in the region.

A note of caution: A positive competitive effect indicates that some economic advantages exist in a region, such as access to natural resources or to a more productive labor pool, management or technologies. The sources of these advantages, however, cannot be identified through SSA.

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

Manufacturing Industries in the Upper East Region, Concentration Levels and Competitiveness
Industry Title NAICS Employment, 2019 Location Quotient, 2019 Employment Changes due to Local Competitiveness, 2009-2019
Food Manufacturing 311 10,751 2.19 998
Beverage and Tobacco Product Manufacturing 312 672 0.78 456
Textile Mills 313 41 0.13 26
Textile Product Mills 314 404 1.20 50
Apparel Manufacturing 315 193 0.59 -17
Leather and Allied Product Manufacturing 316 126 1.52 69
Wood Product Manufacturing 321 3,261 2.67 -326
Paper Manufacturing 322 2,521 2.30 182
Printing and Related Support Activities 323 461 0.36 1
Petroleum and Coal Products Manufacturing 324 744 2.19 117
Chemical Manufacturing (Resource-Intensive Commodities) 3251-3253 2,160 2.54 33
Pharmaceutical and Medicine Manufacturing 3254 485 0.53 132
Chemical Manufacturing (Locally Processed Goods) 3255-3259 628 0.80 37
Plastics and Rubber Products Manufacturing 326 1,594 0.73 -820
Nonmetallic Mineral Product Manufacturing 327 1,287 1.03 -184
Primary Metal Manufacturing 331 1,829 1.58 -226
Fabricated Metal Product Manufacturing 332 7,811 1.75 136
Machinery Manufacturing 333 4,576 1.36 -3,012
Computer and Electronic Product Manufacturing 334 575 0.18 -181
Electrical Equipment, Appliance, and Component Manufacturing 335 690 0.57 183
Motor Vehicle, Body, and Parts Manufacturing 3361-3363 4,424 1.48 296
Aerospace Product and Parts Manufacturing 3364 142 0.09 44
Other Transportation Equipment Manufacturing 3365-3369 1,543 2.14 416
Furniture and Related Product Manufacturing 337 1,801 1.56 546
Medical Equipment and Supplies Manufacturing 3391 1,158 1.19 -16
Other Miscellaneous Manufacturing 3399 870 0.99 235
Total - Manufacturing 50,748 1.32 -824

Sources: JobsEQ and Texas Comptroller of Public Accounts

Summary

Manufacturing employment in the Upper East Region rose by 9 percent (4,186 jobs) between 2009 and 2019, about on par with Texas and the U.S. Most of this job growth occurred between 2017 and 2019, adding more than 3,800 jobs. During the COVID-19 restrictions of 2020, manufacturing employment declined in the Longview and Texarkana MSAs but rose in the Tyler MSA.

Manufacturing is highly consequential to the Upper East region and has strong ties to its energy and mining sector. The region’s manufacturing base is also highly diversified, with high levels of concentration across a wide array of industries, from food products to petrochemical products to machinery and transportation equipment.