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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 TexasAn Overview

Statewide Manufacturing Snapshot |Printable (PDF)

Texas has an unusually diverse manufacturing economy. Its resources make it a natural leader in petroleum and chemical manufacturing; its research institutions have fostered computer and other high-tech manufacturing; and its business-friendly environment and skilled labor have nurtured a burgeoning automotive manufacturing sector. In all, Texas manufacturing contributed $226 billion to the Texas’ gross domestic product (GDP) in 2016, an amount larger than the entire economy of Portugal.

Technological improvements and efficient business processes have transformed much manufacturing from basic, labor-intensive activities to more advanced and highly skilled operations. Although direct manufacturing employment has declined, the industry stimulates employment in related sectors and services and remains a vital spark to innovation; many advanced manufacturing industries invest heavily in scientific and technological research and development (R&D).  

Today, Texas has 858,000 direct manufacturing jobs, as well as another 2.2 million indirect jobs. Average annual Texas wages in manufacturing approached $74,000 in 2016, much higher than the statewide average of $54,000.

Diverging Paths: Employment and GDP

While Texas’ manufacturing employment has diminished, its economic output has increased. From 1997 through 2016, Texas’ manufacturing job count fell by 19 percent, but its real GDP rose by 98 percent (and easily outpacing total Texas GDP growth of 84 percent). This divergence is largely due to productivity gains (Exhibit 1).

Exhibit 1: Percent Change in Real Gross Domestic Product and Employment, 1997 to 2016

Percent Change in Real Gross Domestic Product, 1997 to 2016
Year US Total US Manufacturing Texas Total Texas Manufacturing
1997 0.0% 0.0% 0.0% 0.0%
1998 4.3% 4.8% 6.2% 8.3%
1999 9.2% 10.6% 10.3% 6.6%
2000 13.5% 17.4% 14.0% 13.5%
2001 14.5% 12.7% 16.9% 16.7%
2002 16.6% 13.8% 18.6% 20.1%
2003 19.6% 19.6% 19.6% 24.5%
2004 23.8% 27.3% 25.3% 59.4%
2005 27.7% 30.2% 28.2% 54.5%
2006 31.2% 36.6% 36.2% 72.7%
2007 33.1% 41.0% 42.9% 86.7%
2008 32.4% 36.9% 43.7% 67.5%
2009 28.8% 26.5% 42.9% 59.5%
2010 31.6% 33.2% 46.6% 77.5%
2011 33.4% 33.6% 51.9% 85.7%
2012 36.0% 34.0% 60.5% 83.9%
2013 38.0% 36.6% 68.6% 103.1%
2014 41.1% 37.9% 74.9% 88.6%
2015 44.8% 40.1% 82.8% 98.7%
2016 47.0% 39.9% 83.6% 98.4%

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


In the 1997-2016 period, growth in Texas manufacturers’ economic output more than doubled U.S. manufacturing gains of 40 percent. Notably, U.S. manufacturing’s GDP has yet to reach its pre-recessionary levels (Exhibit 2).

Exhibit 2: Largest Manufacturing Subsectors in Texas by GDP: Growth from 1997 to 2015

Largest Manufacturing Subsectors in Texas by GDP: Growth from 1997 to 2015
Subsector 1997 2015 Increase
Chemical products manufacturing $27.89 $44.42 59.3%
Computer and electronic products manufacturing $4.44 $30.39 584.3%
Petroleum and coal products manufacturing $18.21 $30.24 66.0%
Machinery manufacturing $7.50 $17.24 129.7%
Fabricated metal products $10.17 $13.35 31.2%
Motor vehicles, bodies and trailers, and parts manufacturing $2.75 $13.17 378.6%

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

Note: Data for subsectors is only available through 2015.


Texas Manufacturing Industries

Texas manufacturing accounted for 10.6 percent of all U.S. manufacturing GDP in 2015. The North American Industry Classification System (NAICS) identifies 18 distinct manufacturing subsectors (Exhibit 3). In Texas, petroleum and coal products manufacturing is by far the state’s most important manufacturing activity, accounting for 27.5 percent of the subsector’s entire U.S. GDP.

Texas’ chemical manufacturing GDP reached $55.5 billion in 2015, the highest among the state’s manufacturing subsectors, followed by petroleum and coal products manufacturing at $44.5 billion. Computer and electronic products had the third-highest GDP value, at $28.6 billion. The latter subsector saw a 584 percent GDP increase from 1997 to 2015, the highest growth among subsectors.  

Exhibit 3: Texas Manufacturing Subsectors – Jobs, Average Annual Wages and Gross Domestic Product

Subsector NAICS Code 2016 Jobs 2016 Wages & Salaries Gross Domestic Product, 2015 (Millions) Texas GDP Share of U.S. GDP, 2015
Food and beverage and tobacco products manufacturing 311-312 104,362 $44,935 $14,383 5.6%
Apparel, leather, textile and allied products manufacturing 313-316 17,254 $36,705 $1,059 3.8%
Wood products manufacturing 321 22,715 $41,381 $1,459 4.8%
Paper products manufacturing 322 17,169 $62,994 $2,134 3.6%
Printing and related support activities 323 25,413 $48,422 $1,976 5.1%
Petroleum and coal products manufacturing 324 22,925 $131,897 $44,516 27.5%
Chemical products manufacturing 325 78,845 $108,397 $55,530 14.7%
Plastics and rubber products manufacturing 326 37,649 $52,096 $4,904 6.9%
Nonmetallic mineral products manufacturing 327 37,586 $57,956 $5,269 11.0%
Primary metals manufacturing 331 20,598 $58,704 $3,145 5.6%
Fabricated metal products 332 120,805 $59,519 $14,196 9.5%
Machinery manufacturing 333 91,457 $83,810 $19,658 12.8%
Computer and electronic products manufacturing 334 91,472 $120,389 $28,611 10.3%
Electrical equipment, appliance and components manufacturing 335 19,023 $70,750 $2,463 4.4%
Motor vehicles, bodies and trailers, and parts manufacturing 3361-3363 38,549 $61,865 $13,924 8.5%
Aerospace and other transportation equipment manufacturing 3364-3369 52,327 $98,056 $12,944 9.9%
Furniture and related products manufacturing 337 22,888 $41,794 $1,340 4.8%
Miscellaneous manufacturing (Includes medical devices) 339 30,321 $52,704 $3,003 3.6%
Manufacturing Total 31-33 851,357 $73,738 $230,514 10.6%

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

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