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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

Computer and Electronic Products NAICS 334 Overview

Subsector Snapshot | Printable (PDF)

Fast Facts

  • Computer and electronic product manufacturing provided nearly 91,500 direct Texas jobs in 2016, as well as another 218,000 indirect jobs.
  • The subsector’s GDP totaled $28.6 billion in 2015.
  • Average annual wages in the subsector were $120,000 in 2016, more than double the statewide average of $54,000.
  • This subsector’s exports rose from $35.2 billion in 2008 to $47.1 billion in 2016, a 34 percent increase. Exports to Mexico alone nearly doubled during this period, from $13.5 billion to $26.0 billion, and accounted for more than half of this subsector’s exports in 2016.

Performance

Computer and electronic product manufacturing is by far the fastest-growing Texas manufacturing subsector in terms of economic activity. Its GDP increased by a staggering 584 percent from 1997 to 2015, for 11.3 percent average annual growth (the subsector experienced even greater economic expansion in the U.S. as a whole, with GDP rising by 680 percent). During this period, total Texas subsector employment declined by 38 percent (Exhibit 4).

Exhibit 4: Computer and Electronic Product Manufacturing – Real GDP and Employment Index in Texas, 1997-2015

Year Real GDP Employment
1997 0% 0%
1998 43% 12%
1999 42% 12%
2000 97% 16%
2001 96% 8%
2002 139% -10%
2003 170% -20%
2004 266% -21%
2005 309% -22%
2006 441% -23%
2007 392% -22%
2008 481% -23%
2009 439% -30%
2010 510% -33%
2011 532% -31%
2012 514% -31%
2013 541% -33%
2014 534% -36%
2015 584% -38%

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

Exhibit 5: Percent Employment Change in Computer and Electronic Product Manufacturing, U.S. vs. Texas, 1990-2016 (Indexed to 1990)

Year U.S. Texas
1990 0% 0%
1991 -5% -2%
1992 -10% -8%
1993 -13% -8%
1994 -13% -4%
1995 -11% 3%
1996 -8% 12%
1997 -5% 19%
1998 -4% 33%
1999 -6% 32%
2000 -4% 38%
2001 -8% 28%
2002 -21% 7%
2003 -29% -5%
2004 -30% -6%
2005 -31% -8%
2006 -31% -9%
2007 -33% -7%
2008 -35% -9%
2009 -40% -17%
2010 -42% -20%
2011 -42% -18%
2012 -43% -19%
2013 -44% -21%
2014 -45% -24%
2015 -45% -26%
2016 -45% -28%

Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts


Long-Term Employment Trends

Computer and electronic product manufacturing jobs in Texas rose by 38 percent in the 1990s, peaking at nearly 174,000 jobs in 2000. Today Texas and U.S. employment in the subsector are down by 28 and 45 percent, respectively, from 1990 levels (Exhibit 5).

Several factors beyond the general productivity increases seen throughout manufacturing have contributed to this downturn. The electronics industry — and specifically semiconductor production — is very capital intensive and expensive. A new fabrication plant can cost more than $10 billion. Many nations offer tax incentives to lure such businesses; unfortunately, high corporate tax rates and low R&D tax credits prevent the U.S. from receiving more of these projects and, consequently, more manufacturing jobs. In addition, ever-changing technology requires companies to invest heavily in R&D — from 15 to 20 percent of gross sales on average. This combination of high upfront costs, lack of incentives and required R&D investments has compounded the decline in manufacturing employment.

Computer and Electronic Product Manufacturing Industries

Computer and electronic product manufacturing includes six industries, including manufacturers of computers and peripherals, semiconductors, audio and visual equipment and navigation equipment (Exhibit 6).

All six sectors are considered “advanced industries,” as defined by the Brookings Institution. Such industries have two distinguishing criteria: R&D 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. In 2015, advanced industries accounted for just 8.7 percent of total U.S. jobs, yet generated 60 percent of exports, 81 percent of patents and 89 percent of private sector R&D. Its emphasis on innovation and highly skilled workers makes advanced industries essential to growing prosperity and rising standards of living.

Industry Concentration in Texas

A common way to measure industry concentration is with location quotient (LQ), a measure of industry concentration in a given area in terms of employment: the higher the LQ value, the more concentrated the industry.

Texas’ computer and electronic product manufacturing LQ was 1.05 in 2016, meaning its share of the industry’s employment is 5 percent greater in Texas than in the U.S. (Exhibit 6). The computer and peripheral equipment manufacturing industry had the highest LQ of 1.52, indicating the industry’s employment share is 50 percent higher in Texas. The LQ values of communications equipment and semiconductor component manufacturing also are relatively high in Texas, despite a decline indicating the state lost some market share.

Exhibit 6: Industries Within Computer and Electronic Product Manufacturing

Description NAICS Code 2016 Jobs 2001 to 2010
% Change
2010 to 2016
% Change
2016 Average Salaries 2001 Location Quotient 2016 Location Quotient
Computer and Peripheral Equipment 3341 20,824 -45% 27% $133,936 1.43 1.52
Communications Equipment 3342 10,342 -62% -12% $130,557 1.86 1.44
Audio and Video Equipment 3343 732 -50% 20% $86,977 0.36 0.45
Semiconductor and Other Electronic Components 3344 38,721 -42% -7% $125,092 1.56 1.27
Navigational, Measuring, Electromedical and Control Instruments 3345 20,020 5% -13% $93,411 0.64 0.61
Manufacturing and Reproducing Magnetic and Optical Media 3346 833 -47% -32% $114,609 0.52 0.65
Computer and Electronic Product Total 334 91,472 -40% -3% $120,389 1.26 1.05

Sources: Emsi and Texas Comptroller of Public Accounts


Service-Related Industries

As computer and electronic manufacturing employment has declined, high-paying service-related jobs in high tech and information technology have taken their place. The computer systems design and related services industry, for instance, added about 64,000 Texas jobs between 2010 and 2016, a gain of 63 percent (Exhibit 7).

Exhibit 7: Total Employment, Computer and Electronic Product Manufacturing vs. Computer Systems Design and Related Services,
1990-2016

Year Product Manufacturing Systems Design and Related Services
1990 126,200 19,600
1991 123,800 21,200
1992 116,200 22,600
1993 116,500 26,000
1994 121,200 29,900
1995 130,000 35,000
1996 140,800 42,800
1997 149,900 51,500
1998 167,400 62,800
1999 167,200 73,200
2000 173,900 84,900
2001 162,000 84,700
2002 134,500 74,300
2003 120,200 70,300
2004 118,000 73,600
2005 116,300 77,600
2006 115,000 84,100
2007 117,300 92,700
2008 114,800 101,500
2009 104,600 98,000
2010 100,600 101,400
2011 103,300 110,200
2012 102,800 123,400
2013 100,100 133,800
2014 96,000 147,400
2015 92,800 159,800
2016 90,700 165,400

Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts


Conclusion

Manufacturing is an important part of the Texas economy, driving innovation and providing thousands of jobs with high wages. While the industry’s employment has declined over the last 20 years, its contribution to Texas GDP has increased — nearly double the industry’s contribution to U.S. GDP and exceeding growth in Texas’ total GDP by 15 percent. In 2015, Texas accounted for 10.2 percent of the nation’s manufacturing GDP.

Computer and electronic products accounted for $47.1 billion in exports in 2016, second only to chemical manufacturing. The subsector supports 91,472 direct Texas jobs with average annual wages of $120,389.

Computer and peripheral equipment, communications equipment and semiconductor and other electronic components (NAICS codes 3341, 3342 and 3344, respectively) have a high Texas LQ for both manufacturing and services. The subsector is concentrated in Texas compared to other states, yet Texas may be losing market share, considering that LQ values declined from 2001 through 2016. Computer and electronic products (334) is a cornerstone of Texas manufacturing, particularly in the Austin-Round Rock and Dallas-Fort Worth-Arlington metro areas.

HB855 Browser Statement

In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.

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