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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

economyEconomic Data

Manufacturing in the West Texas Region

The 30-county West Texas Region covers about 39,800 square miles in western Texas, stretching from the cities of Mason and Brady in the east to the Rio Grande just south of Dryden and north to the city of Seminole.

The West Texas Region contains three metropolitan statistical areas (MSAs): The Midland MSA, comprising the counties of Martin and Midland; the Odessa MSA, comprising Ector County; and the San Angelo MSA, comprising Irion and Tom Green counties. Counties in the region not associated with an MSA include Andrews, Borden, Coke, Concho, Crane, Crockett, Dawson, Gaines, Glasscock, Howard, Kimble, Loving, Mason, McCulloch, Menard, Pecos, Reagan, Reeves, Schleicher, Sterling, Sutton, Terrell, Upton, Ward and Winkler. The West Texas Region’s two largest economic centers are the cities of Midland (in Midland County) and Odessa (in Ector County).

In 2019, the West Texas Region had an estimated population of about 662,000 or 2.3 percent of the state total. The region’s total employment of 315,590 accounted for 2.5 percent of the state’s total employment.

The region included more than 15,000 manufacturing jobs in 2019, about 4.8 percent of its total employment. Manufacturing’s regional gross domestic product (GDP) of $3.4 billion accounted for 4.1 percent of the total regional GDP of $82.1 billion. The West Texas Region’s manufacturers paid nearly $1.1 billion in wages in 2019, or 5.3 percent of total regional wages of $20.4 billion. Annual wages for its manufacturing jobs averaged about $71,500 in 2019 (Exhibit 1), exceeding the region’s average wage of about $64,700.

The West Texas Region’s energy sector drives development and employment in supporting industries. In 2019, employment in mining and oil and gas extraction accounted for nearly 16 percent of total regional jobs, compared to just 1.6 percent of Texas jobs and 0.4 percent of all U.S. jobs. The region boasts a high concentration of employment in manufacturing industries that support these energy operations, particularly machinery manufacturing and fabricated metal production.

Key stakeholders are focused on developing diversification and workforce development in the region:

  • The University of Texas Permian Basin (UTPB) recently partnered with the Midland Development Corporation and the Odessa Development Corporation to enhance UTPB’s Center for Energy and Economic Diversification. The program promotes entrepreneurial and advanced workforce skills through multiple projects, including an Advanced Manufacturing Center and a Small Business Development Center.    
  • The San Angelo Regional Manufacturers Alliance, through the San Angelo Chamber of Commerce, supports the area’s manufacturing and energy companies with infrastructure and legislative advocacy and workforce training.

Exhibit 1: Manufacturing Overview by County, West Texas Region, 2019

County Employment Gross Domestic Product Wages
Total Share Total
(millions)
Share Total
(millions)
Share Average
Annual Wages
Andrews 254 3.2% $40 1.4% $13 2.4% $52,997
Borden 6 2.2% (D) (D) $0 2.4% $46,185
Coke 10 1.4% $1 1.2% $1 2.2% $65,162
Concho 18 2.3% (D) (D) $1 1.9% $33,796
Crane 29 2.6% (D) (D) $2 2.8% $65,001
Crockett 15 1.0% (D) (D) $1 1.1% $46,559
Dawson 75 1.7% $8 1.2% $4 2.3% $55,299
Ector 5,169 6.4% $1,233 9.7% $399 7.6% $77,186
Gaines 284 4.3% $32 1.5% $15 4.2% $54,527
Glasscock 23 4.2% (D) (D) $2 5.8% $76,444
Howard 860 6.3% $536 8.8% $69 9.6% $80,312
Irion 28 3.0% (D) (D) $1 2.3% $49,669
Kimble 56 4.4% $16 10.3% $2 6.1% $44,729
Loving 60 56.9% (D) (D) $3 67.6% $47,940
Martin 83 3.0% $27 0.4% $6 3.8% $75,127
Mason 32 3.0% $3 2.4% $1 3.9% $43,996
McCulloch 139 5.3% $23 6.1% $6 5.8% $45,443
Menard 6 1.3% (D) (D) $0 1.1% $24,484
Midland 4,062 3.8% $749 2.9% $288 3.4% $70,987
Pecos 74 1.3% $12 0.5% $4 1.3% $49,661
Reagan 0 0.0% $2 0.1% 0.0%
Reeves 105 1.2% $38 0.4% $11 1.8% $106,994
Schleicher 35 4.5% (D) (D) $2 6.0% $62,688
Sterling 0 0.0% $0 0.1% 0.0%
Sutton 53 3.0% $16 5.2% $6 5.5% $121,386
Terrell 0 0.0% $0 0.0% $0 0.0%
Tom Green 3,297 6.9% $615 10.4% $217 10.0% $65,771
Upton 3 0.2% (D) (D) $0 0.1% $40,628
Ward 189 3.0% $28 0.8% $14 3.3% $71,543
Winkler 43 1.2% (D) (D) $2 0.9% $55,137
West Texas Region Total 15,008 4.8% $3,378 4.1% $1,073 5.3% $71,472
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

Long-Term Regional Trends

Between 2001 and 2019, manufacturing employment in the West Texas Region rose by nearly 4 percent or 530 jobs. Manufacturing’s share of total regional employment fell from 6.9 percent to 4.8 percent in this period (Exhibit 2).

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

Manufacturing Employment and Manufacturing Share of Total Employment, 2001 to 2019, West Texas Region
Year Total Industry Jobs Manufacturing Jobs Manufacturing Share of Total Industry Jobs
2001 208,356 14,477 6.9%
2002 205,554 13,081 6.4%
2003 207,075 12,397 6.0%
2004 207,740 12,296 5.9%
2005 214,257 12,213 5.7%
2006 223,914 13,065 5.8%
2007 230,998 13,360 5.8%
2008 240,302 13,702 5.7%
2009 229,449 12,005 5.2%
2010 233,677 12,375 5.3%
2011 248,083 13,804 5.6%
2012 263,815 15,208 5.8%
2013 272,805 14,991 5.5%
2014 286,302 15,650 5.5%
2015 280,710 14,624 5.2%
2016 264,932 12,555 4.7%
2017 277,085 12,845 4.6%
2018 305,129 14,661 4.8%
2019 315,590 15,008 4.8%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The manufacturing sector’s close linkage with the energy sector subjects it to some employment volatility. The effects of the 2015-2017 plunge in oil prices are obvious in Exhibit 3, with regional manufacturing employment seeing a much sharper decline than the state as a whole. Despite this volatility, the region’s manufacturing employment rose by 25 percent between 2009 and 2019. Manufacturing employment in the U.S. and Texas, by contrast, rose by 8.2 percent and 8 percent, respectively, in the same period.

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

Total Manufacturing Jobs, 2009-2019 (Indexed to 2009)
Year West Texas Region Jobs West Texas Region Percent Change Texas Jobs Texas Percent Change USA Jobs USA Percent Change
2009 12,005 0.0% 841,353 0.0% 11,854,159 0.0%
2010 12,375 3.1% 814,265 -3.2% 11,532,264 -2.7%
2011 13,804 15.0% 840,195 -0.1% 11,748,311 -0.9%
2012 15,208 26.7% 867,771 3.1% 11,950,974 0.8%
2013 14,991 24.9% 877,534 4.3% 12,040,273 1.6%
2014 15,650 30.4% 890,468 5.8% 12,202,119 2.9%
2015 14,624 21.8% 881,291 4.7% 12,339,571 4.1%
2016 12,555 4.6% 848,235 0.8% 12,345,948 4.1%
2017 12,845 7.0% 854,385 1.5% 12,456,179 5.1%
2018 14,661 22.1% 882,339 4.9% 12,696,998 7.1%
2019 15,008 25.0% 908,801 8.0% 12,828,307 8.2%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The region’s number of manufacturing establishments also experienced significant volatility between 2009 and 2019. The number of West Texas manufacturing establishments rose from 624 in 2009 to 687 in 2019, a 10.1 percent increase. This exceeded gains of 9.4 percent in Texas and 1.1 percent in the U.S. (Exhibit 4).

Exhibit 4: Total Manufacturing Establishments, West Texas Region, 2009 to 2019

Total Manufacturing Establishments in the West Texas Region, 2009 to 2019
Year West Texas Region (total) West Texas Region Texas USA
2009 624 0.0% 0.0% 0.0%
2010 651 4.3% -1.4% -2.5%
2011 664 6.4% -1.6% -4.0%
2012 667 6.9% -1.9% -4.7%
2013 655 5.0% -2.0% -4.7%
2014 663 6.3% -1.4% -3.9%
2015 662 6.1% 0.4% -3.0%
2016 648 3.8% 1.7% -2.2%
2017 641 2.7% 3.8% -1.3%
2018 656 5.1% 5.7% 0.0%
2019 687 10.1% 9.4% 1.1%

Sources: JobsEQ and Texas Comptroller of Public Accounts

The region’s manufacturing jobs paid average wages of nearly $71,500 in 2019, exceeding the U.S. average. Between 2009 and 2019, the region’s average wages rose by 44 percent, versus increases of 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 West Texas Region Texas USA
2009 $49,537 $60,401 $54,939
2010 $52,404 $63,310 $57,595
2011 $56,157 $66,075 $59,277
2012 $57,525 $68,491 $60,553
2013 $60,226 $68,838 $61,143
2014 $65,978 $71,171 $63,024
2015 $64,312 $72,815 $64,352
2016 $63,731 $73,125 $64,922
2017 $66,444 $75,806 $66,898
2018 $70,308 $77,647 $68,585
2019 $71,472 $79,746 $69,976

Sources: JobsEQ and Texas Comptroller of Public Accounts

The manufacturing sector’s GDP contribution to the West Texas Region also reflects the volatility brought on by its connection with the energy sector. Regional manufacturing GDP experienced large swings between 2009 and 2019, reflecting the period’s boom-and-bust cycle. West Texas manufacturing GDP ultimately rose by an inflation-adjusted 44.4 percent in the 10-year period, exceeding Texas and U.S. gains of 29.7 percent and 20.8 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 West Texas Region Texas USA
2009 0.0% 0.0% 0.0%
2010 15.7% 10.8% 5.4%
2011 45.6% 15.0% 5.8%
2012 55.1% 10.9% 5.1%
2013 54.4% 23.3% 8.3%
2014 19.5% 11.3% 10.2%
2015 18.5% 15.0% 11.7%
2016 -6.0% 11.7% 10.9%
2017 17.1% 18.2% 13.7%
2018 36.9% 24.4% 18.5%
2019 44.4% 29.7% 20.8%

Note: Due to the withholding of data to avoid the disclosure of confidential information, the analysis excludes Borden, Coke, Concho, Crane, Crockett, Glasscock, Irion, Loving, Martin, Menard, Reagan, Reeves, Schleicher, Sterling, Sutton, Terrell, Upton and Winkler counties.

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. The global pandemic and shocks to the oil and gas industry in early 2020 caused major job losses in the West Texas Region. In February 2021, total employment in the Midland and Odessa metropolitan areas was down by about 18 percent versus the same month in the previous year. Losses in the manufacturing sector were even more severe, with year-over-year losses of 26 percent in Odessa and 24 percent in Midland. These losses far exceeded year-over-year manufacturing job declines of Texas (-6.0 percent) and the U.S. (-4.1 percent), as shown in Exhibit 7. The impact in San Angelo was far less severe, with the loss of 200 jobs, a 6.1 percent decline.

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

Metro Area Manufacturing Jobs Percent Change (Manufacturing) Percent Change (Total Employment)
Midland -1,000 -23.8% -17.5%
Odessa -1,300 -26.0% -17.9%
San Angelo -200 -6.1% -5.0%
Texas -54,200 -6.0% -4.6%
United States -524,000 -4.1% -6.0%

Note: Not seasonally adjusted.

Source: Texas Workforce Commission

Key Manufacturing Industries

Two industries with close ties to the region’s energy sector — machinery and fabricated metal products manufacturing — were the region’s most significant manufacturing industries in 2019, with employment of about 4,000 and 3,800, respectively, comprising 52 percent of total regional manufacturing jobs. These industries were also among the fastest growing between 2009 and 2019, as machinery manufacturers added 774 jobs (a 26 percent rise) and fabricated metal product manufacturers added 1,152 jobs (a 40 percent increase). Other industries showing strong employment growth included motor vehicle, body and parts manufacturing and electrical equipment and component manufacturing.  

The interactive Exhibit 8 displays 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 inform development prospects and assess industry strengths beyond simple measures of employment change.

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. Between 2009 and 2019, SSA shows that manufacturing employment in the West Texas Region exceeded expected changes by about 2,100 jobs.

The West Texas 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).

Unsurprisingly, manufacturing industries with close ties to the energy sector have a strong presence in the West Texas Region. Machinery manufacturing and fabricated metal products had 2019 LQ values of 1.56 and 1.25, respectively. (In other words, the industries’ share of regional employment are 56 percent and 25 percent higher, respectively, than the industries’ nationwide share.) According to SSA calculations, these two industries also exhibited high degrees of competitiveness. Between 2009 and 2019, machinery manufacturers exceeded expected employment gains 741 jobs, while fabricated metal producers exceeded expected gains by 605 jobs.

Employment concentrations for many of the region’s other manufacturing industries remain below national averages, yet several showed high degrees of competitiveness, including motor vehicle, body and parts manufacturing, electrical equipment and component manufacturing and primary metal manufacturing. Such developments could identify emerging industries and prospects for further industrial 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 West Texas Region, Concentration Levels and Competitiveness

Manufacturing Industries in the West Texas Region, Concentration Levels and Competitiveness
Industry Title NAICS Employment, 2019 Location Quotient, 2019 Employment Changes due to Local Competitiveness, 2009-2019
Food Manufacturing 311 1,301 0.37 -200
Beverage and Tobacco Product Manufacturing 312 131 0.21 38
Textile Mills 313 1 0.00 -13
Textile Product Mills 314 138 0.57 -40
Apparel Manufacturing 315 33 0.14 19
Leather and Allied Product Manufacturing 316 46 0.78 6
Wood Product Manufacturing 321 253 0.29 -3
Paper Manufacturing 322 382 0.49 -26
Printing and Related Support Activities 323 327 0.36 28
Petroleum and Coal Products Manufacturing 324 277 1.14 -53
Chemical Manufacturing (Resource-Intensive Commodities) 3251-3253 410 0.67 43
Pharmaceutical and Medicine Manufacturing 3254 115 0.17 50
Chemical Manufacturing (Locally Processed Goods) 3255-3259 392 0.70 30
Plastics and Rubber Products Manufacturing 326 480 0.31 -157
Nonmetallic Mineral Product Manufacturing 327 528 0.59 135
Primary Metal Manufacturing 331 341 0.41 265
Fabricated Metal Product Manufacturing 332 3,998 1.25 605
Machinery Manufacturing 333 3,761 1.56 741
Computer and Electronic Product Manufacturing 334 181 0.08 45
Electrical Equipment, Appliance, and Component Manufacturing 335 349 0.41 229
Motor Vehicle, Body, and Parts Manufacturing 3361-3363 699 0.33 401
Aerospace Product and Parts Manufacturing 3364 34 0.03 -27
Other Transportation Equipment Manufacturing 3365-3369 178 0.34 152
Furniture and Related Product Manufacturing 337 132 0.16 -138
Medical Equipment and Supplies Manufacturing 3391 167 0.24 -88
Other Miscellaneous Manufacturing 3399 352 0.56 52
Total - Manufacturing 15,008 0.54 2,096

Sources: JobsEQ and Texas Comptroller of Public Accounts

Summary

The West Texas Region’s manufacturing employment rose by 25 percent between 2009 and 2019. These gains greatly surpassed those seen in Texas and in the U.S. The Midland and Odessa metropolitan areas, however, suffered heavy employment losses in 2020 due to COVID-19 and the oil price crash. The region’s manufacturing industries, which are heavily linked to its energy sector, were particularly devastated by the pandemic. The region’s manufacturing base looks to bounce back as oil prices recover in 2021.