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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

Paper ManufacturingNAICS 322 Overview

Subsector Snapshot | Printable (PDF)

Introduction

This subsector includes pulp and paper mills and manufacturers of paper products, including office supplies and products for shipping and packaging.

Fast Facts

  • Paper manufacturing provided about 17,200 direct Texas jobs in 2016, as well as another 30,000 indirect jobs.
  • The subsector’s Gross State Product (GSP) totaled $2.1 billion in 2015.
  • Its annual wages averaged about $62,800 in 2016. 
  • Subsector exports from Texas were valued at nearly $1.9 billion in 2016.

Long-Term Employment Trends

Both U.S. and Texas employment in paper manufacturing have declined sharply in the last two decades. Since 1990, subsector employment is down by 32 percent in Texas and 43 percent in the nation as a whole. Texas’ subsector saw a slight increase in employment — 4 percent or 700 jobs — from 2015 through 2017 (Exhibit 1), while the national job count continued to decline.

Subsector Economic Output Trends

As employment in the paper manufacturing subsector has declined, so too has its economic output. The Texas subsector’s inflation-adjusted GSP fell by 51 percent from 1997 to 2015; in the same period, the U.S. subsector’s gross product declined by 37 percent (Exhibit 2).

Exhibit 1: Paper Manufacturing, Percent Change in Employment, U.S. vs. Texas 1990 to 2017 (Indexed to 1990)

Percent Change in Employment
Year U.S. Texas
1990 0% 0%
1991 -1% 0%
1992 -1% 1%
1993 -1% 6%
1994 -1% 12%
1995 -1% 18%
1996 -2% 16%
1997 -3% 14%
1998 -3% 13%
1999 -5% 10%
2000 -7% 9%
2001 -11% 3%
2002 -16% -3%
2003 -20% -7%
2004 -23% -14%
2005 -25% -16%
2006 -27% -20%
2007 -29% -22%
2008 -31% -25%
2009 -37% -30%
2010 -39% -32%
2011 -40% -32%
2012 -41% -33%
2013 -42% -34%
2014 -42% -35%
2015 -42% -35%
2016 -43% -33%
2017 -43% -32%

Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts

Exhibit 2: Paper Manufacturing, Percent Change in Real GDP, U.S. vs. Texas, 1997 to 2015 (Indexed to 1997)

Percent Change in Real GDP
Year U.S. Texas
1997 0% 0%
1998 -8% 15%
1999 -3% 10%
2000 -9% 2%
2001 -22% -14%
2002 -20% -17%
2003 -21% -23%
2004 -16% -17%
2005 -19% -26%
2006 -14% -31%
2007 -20% -35%
2008 -30% -43%
2009 -27% -34%
2010 -33% -40%
2011 -37% -41%
2012 -37% -50%
2013 -36% -47%
2014 -35% -49%
2015 -37% -51%

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 0.56 LQ in paper 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 paper manufacturing subsector is highly concentrated in the Upper East, Central and Southeast Texas regions (Exhibit 4).

Exhibit 3: Paper Manufacturing in Texas: Industries

Jobs, Wages and Concentration by Industry
Industries NAICS 2016 Jobs 2010 to 2016
% Change
2016
Average Wages
2016
Location Quotient
Paper Manufacturing 322 17,207 -2.50% $62,783 0.56
Pulp, Paper and Paperboard Mills 3221 2,980 -1.50% $85,266 0.36
Converted Paper Product Manufacturing 3222 14,228 -2.70% $58,075 0.63

Source: Emsi and Texas Comptroller of Public Accounts

Exhibit 4: Paper Manufacturing LQ and Employment by Region, 2016

Jobs and Employment Concentration
Region 2016
Location Quotient
2016 Jobs
Upper East 2.09 2,266
Central 1.69 2,086
Southeast 1.68 1,153
Upper Rio Grande 0.92 785
Metroplex 0.79 7,066
West 0.77 532
Northwest 0.5 272
South 0.36 751
High Plains 0.2 195
Gulf Coast 0.19 1,431
Alamo 0.18 520
Capital 0.05 127
Texas 0.56 17,207

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.

The paper manufacturing subsector’s employment and economic output levels have declined since the mid-1990s, both in the U.S. and Texas. Demand for paper products has declined as consumers shift to digital media. The subsector is buoyed, however, by demand for packaging from food and beverage industries.  

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