The Capital Area or the “Corridor Region” MSA: Austin-San Marcos, TX Bastrop, Caldwell, Hays, Travis, Williamson.

As the Capital Area works to address challenges related to middle-skill and middle-wage jobs, Data Points is taking a close look at the manufacturing sector, one of the key historical sources of those jobs throughout the country.

The History of Manufacturing in Travis County

The figure below shows manufacturing employment, as well as the number of manufacturing establishments, since 1970 in Travis County. The figure shows the steady rise of manufacturing employment, peaking at roughly 60,000 workers in 2000, followed by a steep decline. Historically, the overwhelming majority of manufacturing jobs in Travis County have been in the electronics and semiconductor sectors. And despite the high profile opening of a large Samsung plant in 2007, employment in those sectors in Travis County has continued to decline.

However as of 2013, the County Business Patterns program at the Census Bureau estimates there are about 28,000 manufacturing jobs in Travis County, up slightly from the 2010 estimate. Those job gains have come in across a wider range of manufacturing sectors, helping to diversify manufacturing employment beyond electronics and semiconductors.

And while total employment has declined precipitously from its peak in 2000, the number of manufacturing establishments has largely stabilized near peak levels. Following employment trends, establishments in Travis County are growing more diverse, operating in sectors ranging from food and beverage manufacturing (108 establishments in 2013) to fabricated metal and machinery manufacturing (132 establishments in 2013).

Outlook for the Future of Manufacturing in the Capital Area

 Turning from history to the future, how will manufacturing in our region continue to evolve? How will dynamics like rapid population growth, the rising price of land, and an increasingly diverse economy shape the region’s goods producing sectors? We may not have all the answers yet, but there are several interesting factors to consider.

First, the increasingly regional nature of the local economy has been a boon for manufacturing opportunities. While manufacturing of semiconductors and electronics components has declined in Travis County, it has blossomed in the rest of the MSA. Between 2001 and 2016 the number of jobs in that sector in the rest of the MSA grew from just under 3,000 to about 7,750—an increase of about 161 percent. Overall, manufacturing employment in the non-Travis counties of the MSA has increased from 13,564 in 2001 to 18,659 in 2016.

Moreover, each of the counties in the MSA offers compelling competitive advantages that are fueling manufacturing successes. Workforce skills, access to transportation infrastructure, and cost of doing business varies enough across the region to allow the Capital Area to appeal to a wide range of companies within the manufacturing sector. Many of the economic development organizations in the region target the recruitment and expansion of manufacturing firms, and the growth seen in numerous sectors in the table to the right attests to the viability of that strategy.

Other efforts are also underway to strengthen manufacturing in the region. Texas Workforce Commission and Austin Community College are proving to be a powerful partnership to provide targeted skills development to companies in need of workers with specific manufacturing capabilities. Commercialization of research coming out of the University of Texas and Texas State has the potential to create new high-growth manufacturing companies in the region.

And looking at future workers, House Bill 5 and an increased emphasis on technical/vocational training in high school offers a mechanism for training a new generation of skilled manufacturing workers.

One seemingly large loss to the future competitiveness of manufacturing in the region is Union Pacific’s decision to pull out of the Lone Star Rail project.

While there has been much discussion of that project’s potential benefits through the provision of commuter rail, the creation of a new freight line running through the eastern part of the MSA offered interesting potential for manufacturing in the region. The apparent loss of that potential feels like a missed opportunity to jumpstart manufacturing in a part of the MSA that is hungry for middle-skill job opportunities.

In short, manufacturing is no sure bet to be the provider of middle-skill employment opportunities in the Capital Area that it once was. However, there are reasons to be optimistic about the sector’s future, and working to identify opportunities to support manufacturing in the region may be an economic development strategy that bears considerable fruit.

Manufacturing Economic Impacts

For every 10 manufacturing jobs added in the regional economy, an additional 10 local jobs are added indirectly through supply chain impacts, and regional economic output increases by more than $2 million. 

The average annual wage in manufacturing in the Austin MSA exceeds $60,000.

This article originally published in Data Points, a monthly look at the 10-County Capital Area, a publication of CAPCOG.

About CAPCOG Economic Development  |  CAPCOG’s Economic Development Program works closely with cities, counties, chambers of commerce and economic development corporations of the Texas capital area, providing education, training and expert assistance. Services include providing in-depth economic analysis, managing special projects related to regional planning and economic strategy and helping communities devise new strategies for improved competitiveness.

To discuss specific projects or available services, contact CAPCOG Planning and Economic Development Director, Chris Schreck.

The “Corridor Region” MSA: Austin-San Marcos, TX Bastrop, Caldwell, Hays, Travis, Williamson.