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Manufacturing Is Not Dead: Texas Edition

May 18, 2018 by Emsi Burning Glass

In March, we published a major research report on manufacturing titled “Manufacturing Is Not Dead: The Rise of High-Skill, High-Wage Production Jobs.” Since then, the report has been shared with particular interest in our skills analysis. We examined the recent growth of manufacturing jobs (800,000+ since 2010), which skills manufacturers are looking for, and how much they’re willing to pay for them.

We discovered that today’s manufacturing industry needs a new generation of workers with a new blend of traditional and engineering skills. Some companies and schools are already working together to address this skills gap.

As a follow-up to that report, we partnered with the Texas Economic Development Council to present this week’s webinar focusing specifically on manufacturing in Texas.

What Does Manufacturing Look Like in Texas?

Before we get into a skills analysis, let’s first take a look at Texas’ manufacturing scene as a whole. Here are some key things to know:

  1. Texas has the second highest number of manufacturing jobs in the country (after California).
  2. 7% of all U.S. manufacturing jobs are based in Texas.
  3. Manufacturing makes up 12.5% of Texas’ regional GDP (or GRP, as we call it).
  4. About 9% of the U.S.’ manufacturing GRP comes from Texas.

Manufacturing is most prevalent in the Waco, Houston, Dallas, Austin, Tyler, and San Antonio MSAs, and contributes significantly to the overall number of jobs and GRP. For example, manufacturing contributes over $78 million to Houston’s GRP (15% of the metro’s total) and makes up 20% of Waco’s economy.

Like the rest of the country, manufacturing suffered steep losses in Texas before and during the recession. From 2001-2009, Texas lost over 190,000 manufacturing jobs. That’s a 19% overall decrease. Post-recession (2010-2017), the top MSAs, except for Houston and Tyler, all saw solid growth. Here’s a map showing how each of the state’s top metros, plus a couple other manufacturing-focused MSAs, fared during those two time periods:

Figure 1. Manufacturing Growth in Texas Metros, 2001-2009 and 2010-2017

Similar to what we saw on the national level, almost all of our top Texas manufacturing metros saw post-recession growth. However, it doesn’t come close to reaching pre-recession employment levels. This brings us to our next question. How have manufacturing jobs and skills evolved since the recession?

National Skills Analysis

In our “Manufacturing Is Not Dead” paper, we examined nearly 400,000 production job postings from 2017 to determine the top skills that employers need. Our original analysis covered the United States, Michigan, California, and Tennessee. Now, we’ll add in Texas.

First, let’s look at the manufacturing skill clusters on the national level. To find these, we looked at production job skills and how they grouped together to form skill “clusters.” The U.S. has four distinct clusters: traditional manufacturing, computer-automated technologies (CAT), Six Sigma, and good manufacturing practices (GMP). For more about each of those, see our original report.

When we examined the top four skill clusters for production jobs across the U.S., we found that two of them (traditional and CAT) are more aligned with what we typically associate with production workers. The other two clusters (Six Sigma and GMP) are more oriented toward engineering.

Figure 2. Top Four Skill Clusters in the U.S.

Texas Skills Analysis

Compared to the national manufacturing scene, Texas’ is a lot more diverse. As a result, we have five skill clusters: computer-automated technologies, good manufacturing practices, Six Sigma, traditional manufacturing, and vehicles. It seems fitting that the Lone Star State’s skill clusters ended up in the shape of a star.

Figure 3. Top Five Skill Clusters in Texas


The new “vehicles” cluster encompasses production skills primarily related to the specialized needs of the auto, aerospace, and defense industries. Let’s take a closer look at the skills in each cluster:

Figure 4. Vehicles, Texas’ Most Prominent Skills Cluster


Electrical skills like circuit breakers, voltage, and transformers dominate Texas’ CAT cluster, along with process improvement skills like corrective and preventive actions.

Figure 5. Computer-Automated Technologies, Texas’ Second Most Prominent Cluster

GMP is all about quality control and ensuring products meet necessary standards, whether those are consumer-driven or mandated by groups like the Food and Drug Administration (FDA). That’s why you see skills like product quality management, predictive analytics, and corrective and preventive actions.

Figure 6. Good Manufacturing Practices, Texas’ Third Most Prominent Cluster

Six Sigma is a data-driven methodology that improves performance by removing waste and reducing variation. In Texas’ case, those skills come in the form of lean manufacturing, best practices, corrective and preventive actions, and more.

Figure 7. Six Sigma, Texas’ Fourth Most Prominent Cluster

The traditional manufacturing cluster describes the tried-and-true manufacturing skills like welding, drilling, bandsaws, hydraulics, etc.

Figure 8. Traditional Manufacturing, Texas’ Fifth Most Prominent Cluster

Comparing Texas to California and Michigan

 These five clusters, full of skills like automation and lean manufacturing, illustrate that Texas’ manufacturing scene revolves more around traditional manufacturing operations and less around design. California, on the other hand, has an entire cluster dedicated to design, which indicates the advanced engineering going on throughout the state.

Figure 9. Top Four Skill Clusters in California

It’s also notable that Texas’ skill clusters are heavily overlapping. We saw a somewhat similar overlap in Michigan, indicating Michigan manufacturers need multi-skilled production workers. However, Michigan’s clusters only overlap with one other cluster, and they’re divided into two distinct areas: traditional manufacturing (traditional manufacturing and vehicles) vs. engineering (Six Sigma and industrial design).

In Texas, every cluster overlaps, but like Michigan, there is a balancing act occurring between engineering-oriented clusters (Six Sigma, GMP) and the traditional clusters (vehicles, traditional manufacturing, and CAT).

Figure 10. Top Four Skill Clusters in Michigan

Automation Is Not All Bad

As you might have noticed, automation occurs as a skill in all five of Texas’ clusters. This goes to show that automation is indeed making waves in the manufacturing industry. However, it’s not all doom and gloom. Yes, automation is replacing some tasks, but it’s not replacing entire jobs.

Automation is particularly evident in Texas. And with automation comes a demand for workers who understand how the automation technology and processes work since it’s integral to daily tasks. That’s why you see skills like Six Sigma, process improvement, and corrective and preventive actions appearing frequently.

It’s also why soft skills like leadership, problem-solving, and innovation are still high in demand and at low risk of automation.

Figure 11. The Top Soft Skills Mentioned in Manufacturing Job Postings

Texas Employers Are Driving Manufacturing Diversity

Whether it’s General Electric, Coca-Cola, Goodyear, or Samsung, all of these companies are looking for employees with certain skillsets. In Figure 12 below, we’ve illustrated how many jobs in each skills cluster the top Texas manufacturing companies are posting. In Figure 13, you’ll see the multiple skill clusters represented in the top job titles.

Figure 12. Manufacturing Employers in Texas By Cluster

Figure 13. Manufacturing Job Titles in Texas By Cluster

Conclusion and Takeaways

Like the rest of the country, Texas manufacturing is re-emerging after decades of job losses with a new demand for multi-skilled production workers. It’s up to economic developers, workforce professionals, and educators to spread the word about the changing yet still promising future of manufacturing.

Here are a few recommendations on what you can do in your local communities

Combine data with on-the-ground intel: Use labor market data to assess your region’s needs, then validate those needs through conversations with employers on the ground to develop a local action plan.

Double down on partnerships: Promote workforce development and education programs that focus on the modern manufacturing skills. If these programs are not in place, partner to develop a stronger education pipeline.

Find new or better ways to support local manufacturers: Understand local employer skills gaps and provide insight using the research provided today. Speak with employers on internship, apprenticeship, and training opportunities to grow a steadier pipeline. Discuss wage and job description opportunities.

For more information about Emsi or our data, contact Rob Sentz at [email protected]. Follow us on LinkedIn and Twitter.

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