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Machinery ManufacturingNAICS 333 Overview
Subsector Snapshot | Printable (PDF)
Introduction
The machinery manufacturing subsector creates the heavy machinery and equipment used in agricultural, industrial, construction and mining activities, as well as general-purpose machinery such as heating and cooling units and engines and transmissions.
Some industries within this subsector are considered “advanced industries,” as defined by the Brookings Institution. Such industries have research and R&D spending per worker ranking in the top 20 percent of industries, and a share of workers with high levels of scientific and technical knowledge exceeding the national average. Their emphasis on innovation and skilled workers makes the advanced industries essential to growing prosperity and rising standards of living.
Fast Facts
- Machinery manufacturing provided about 88,000 direct jobs in 2016, as well as another 117,000 indirect jobs.
- The subsector contributed $19.7 billion to the Texas GDP in 2015.
- Average annual wages were nearly $83,300 in 2016.
- Texas machinery exports totaled $20.1 billion in 2016, about 9 percent of total state exports.
Long-Term Employment Trends (1990-2016)
Machinery manufacturing employment in Texas rose by 23 percent from 1990 through 2016, compared to a 23 decline in the U.S. In Texas, the subsector does, however, experience large variations in employment levels over time. For example, Texas subsector employment rose by 28 percent from 2010 through 2014 and then fell by 25 percent from 2015 through 2016, coinciding with declining oil prices (Exhibit 1).
Subsector Economic Output Trends
Texas’ machinery manufacturing subsector contributed $19.7 billion to state GDP in 2015. Its inflation-adjusted contribution to Texas GDP rose by 130 percent from 1997 through 2015, compared to an increase of just 8 percent in the U.S as a whole (Exhibit 2). The 130 percent gain was the third-highest among all Texas manufacturing subsectors, behind computer equipment manufacturing and motor vehicle manufacturing. (Exhibit 2).
Exhibit 1: Machinery Manufacturing, Percent Change in Employment, U.S. vs. Texas, 1990-2016 (Indexed to 1990)
| Year | U.S. | Texas |
|---|---|---|
| 1990 | 0.0% | 0.0% |
| 1991 | -4.4% | 2.5% |
| 1992 | -7.0% | -1.2% |
| 1993 | -5.6% | -2.1% |
| 1994 | -2.0% | 3.3% |
| 1995 | 2.3% | 8.3% |
| 1996 | 4.2% | 13.2% |
| 1997 | 6.1% | 19.1% |
| 1998 | 7.4% | 25.5% |
| 1999 | 4.1% | 16.2% |
| 2000 | 3.3% | 17.6% |
| 2001 | -2.8% | 21.2% |
| 2002 | -12.6% | 13.3% |
| 2003 | -18.3% | 7.6% |
| 2004 | -18.8% | 6.2% |
| 2005 | -17.3% | 10.7% |
| 2006 | -16.1% | 21.3% |
| 2007 | -15.8% | 29.2% |
| 2008 | -15.8% | 34.3% |
| 2009 | -27.0% | 20.9% |
| 2010 | -29.3% | 18.7% |
| 2011 | -25.1% | 31.4% |
| 2012 | -22.1% | 44.0% |
| 2013 | -21.7% | 47.0% |
| 2014 | -20.0% | 51.4% |
| 2015 | -20.5% | 45.3% |
| 2016 | -23.4% | 23.0% |
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts
Exhibit 2: Machinery Manufacturing, Percent Change in Real GDP, U.S. vs. Texas, 1997-2015 (Indexed to 1997)
| Year | U.S. | Texas |
|---|---|---|
| 1997 | 0.0% | 0.0% |
| 1998 | 8.0% | 1.0% |
| 1999 | 2.0% | 0.0% |
| 2000 | 5.0% | 16.0% |
| 2001 | -5.0% | 5.0% |
| 2002 | -12.0% | -7.0% |
| 2003 | -12.0% | -3.0% |
| 2004 | -3.0% | 45.0% |
| 2005 | 4.0% | 64.0% |
| 2006 | 12.0% | 98.0% |
| 2007 | 16.0% | 126.0% |
| 2008 | 17.0% | 121.0% |
| 2009 | -7.0% | 67.0% |
| 2010 | 3.0% | 104.0% |
| 2011 | 16.0% | 148.0% |
| 2012 | 16.0% | 149.0% |
| 2013 | 14.0% | 141.0% |
| 2014 | 14.0% | 154.0% |
| 2015 | 8.0% | 130.0% |
Sources: U.S. Bureau of Economic Analysis and Texas Comptroller of Public Accounts
Industry Concentration in Texas
Agricultural, construction and mining machinery manufacturers (NAICS 3331) comprise about half of this subsector’s total jobs in Texas and pay average annual wages of nearly $100,000. This industry has a much higher share of employment in Texas than nationally, as gauged by location quotient (LQ), a measure of employment concentration in a given area; the higher the LQ value, the more “concentrated” the industry. Employment concentration can indicate a regional “industry cluster,” a group of interrelated firms that provide related products or services and share similar needs for workers and suppliers (Exhibit 3).
Within this industry, almost 90 percent of its Texas jobs are in mining (oil and gas) machinery. Texas accounts for about 60 percent of all U.S. jobs in mining machinery manufacturing.
Industry Locations
Nearly half of this subsector’s state jobs are in the Houston metropolitan area, with industry specializations in oil and gas field machinery, air and gas compressors and air conditioning and heating equipment. Subsector employment is prevalent in areas outside the Houston metro area, including construction and industrial machinery manufacturing in the Upper East region Longview and Tyler), farm equipment in the Southeast region (Beaumont-Port Arthur) and oil and gas machinery in the West region (Odessa).
Exhibit 3: Machinery Manufacturing in Texas: Industries
| Description | NAICS Code | 2016 Jobs | 2001 to 2010 % Change |
2010 to 2016 % Change |
2016 Average Salaries | 2001 Location Quotient | 2016 Location Quotient |
|---|---|---|---|---|---|---|---|
| Agriculture, Construction, and Mining Machinery | 3331 | 43,494 | 26.6% | -5.4% | $99,438 | 2.34 | 2.54 |
| Industrial Machinery | 3332 | 6,370 | -24.2% | 15.5% | $85,779 | 0.67 | 0.69 |
| Commercial and Service Industry Machinery | 3333 | 2,413 | -26.7% | -2.0% | $69,013 | 0.33 | 0.32 |
| Ventilation, Heating, Air-Conditioning, and commercial refrigeration equipment | 3334 | 10,722 | -37.1% | 2.7% | $60,148 | 1.26 | 1 |
| metalworking machinery | 3335 | 5,061 | -12.0% | 41.2% | $53,945 | 0.23 | 0.34 |
| Engine, Turbine, And Power Transmission Equipment | 3336 | 4,585 | 8.3% | 11.2% | $65,746 | 0.5 | 0.57 |
| Other General Purpose Machinery | 3339 | 15,403 | -19.4% | 15.4% | $69,778 | 0.72 | 0.72 |
| Manufacturing Subsector Total | 333 | 88,048 | -2.9% | 3.0% | $83,274 | 0.9 | 0.99 |
* Indicates advanced industry as defined by Brookings Institution.
Sources: 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 machinery manufacturing subsector in Texas has experienced strong, long-term economic output growth and employment growth, especially compared to U.S. averages. Employment levels are volatile, however, as a sizable portion of the subsector jobs are in oil and gas machinery manufacturing, a field heavily influenced by fluctuations in oil prices.