The Central Texas countryside is characterized by two major geographic areas. On its eastern side, rolling prairies extend from Hillsboro south to Brenham. Traveling westward, slopes and cedars appear more frequently on the upper rim of the Texas Hill Country. This diverse landscape provides an array of resources that fuel regional industries and foster economic growth.
Manufacturing plays a pivotal role in the area’s economy. Area businesses manufacture a broad range of products including lime, plastics, desserts and soft drinks.
Mining is a traditional pillar of the regional economy. Enterprises such as clay, ceramic and refractory mining have remained robust, while value-added activities such as wholesaling and transportation have evolved to support them.
Since the 1940s, the military has played a large role in the Central Texas economy. Fort Hood, in the Killeen area, has trained and deployed soldiers for military conflicts since World War II. The base’s presence supports local communities and businesses while bringing in jobs from outside the state.
Manufacturing plays a pivotal role in the area’s economy. Area businesses manufacture a broad range of products including lime, plastics, desserts and soft drinks. Blue Bell Ice Cream contributes to the region’s manufacturing strength, and the Mars Snackfood operation in Waco makes products consumed throughout the world.
Central Texas Region Employment Indices, 2003-2013
Source: Economic Modeling Specialists Inc.
Exhibit 2 shows employment estimates for the Central Texas region, including the region’s three metropolitan statistical areas (MSAs) and the non-metro counties. These expected changes are presented in the form of growth indices using 2003 as the base year, with an index equal to 100.
The region has experienced job growth similar to the state’s growth, and should follow state trends through 2013. The employment growth rate in Central Texas should outpace Texas growth in 2009, with a projected decrease in Texas of less than 1 percent, while Central Texas is projected to grow less than 1 percent. Growth in the Bryan-College Station metro area should exceed the Texas growth rate in 2009 and continue outpacing the state through 2013. Non-metro counties in Central Texas are projected to lose jobs in 2009, followed by projected job gains through 2013.
Industry Employment Projections, Central Texas Region, 2003-2013
Sources: Economic Modeling Specialists Inc. and Texas Comptroller of Public Accounts.
Exhibit 3 provides a detailed picture of projected employment growth in Central Texas, displaying growth indices for various industries in the region, with 2003 as the base year. Employment for these industries is presented at the 11-industry “supersector” level of the North American Industry Classification System (NAICS).4
A supersector, as identified by a two-digit NAICS code, represents an aggregation of industries producing related goods and services. At this level, industries are classified into either goods-producing or service-producing supersectors. The goods-producing group comprises three supersectors pertaining to natural resources and mining, construction and manufacturing. The service-producing group comprises seven supersectors providing services including Education and Health, Finance, Government, Information, Leisure and Hospitality, other Services and Trade, Transportation and Utilities.
All of the 11 supersectors in Exhibit 3 should show positive growth between 2003 and 2013. Overall, jobs in the Central Texas economy are expected to grow by 21 percent during this period, despite the current national downturn.
Of the projections by period’s end, three supersectors show steady expansion throughout the period. The Professional and Business Services sector should top all supersector growth with 36 percent more jobs in 2013 than 2003. The sector is projected to add jobs each year to finish with 33,239 in 2013, led by Financial Support Services projected to add 1,589 jobs over the period. Engineering Services should lead all industries in the sector with 2,839 jobs in 2013.
Leisure and Hospitality is another supersector projected to add jobs each year, growing 32 percent from 2003 to 2013 to finish the period with 43,249 jobs. Most of this growth is attributable to its leading job industry, Limited Service Restaurants, which is projected to add 5,644 jobs by 2013.
The third supersector projected to add jobs each year is Education and Health Services. General Medical and Surgical Hospitals lead all industries in jobs and job growth throughout the period, projected to add 42 percent of supersector jobs by 2013 to finish with 17,658. Home Health Care Services should finish as the second largest industry with 7,526 jobs projected in 2013. Educational industries as a group are projected to grow more modestly, led by Colleges, Universities and Professional Schools contributing 4 percent of supersector job growth by 2013.
Despite various industry downturns, other supersectors show strong projected job growth. At almost 32 percent, projected growth in the Agriculture, Natural Resources and Mining sector trails only growth in Professional and Business Services. This comes after strong rebounds from contractions in 2004 and 2006, and growth projected through the 2009 national recession.
Overall, jobs in the Central Texas economy are expected to grow by 21 percent between 2003 and 2013.
Oil and Gas Support Activities should lead all supersector industries, contributing 72 percent job growth by 2013. Dimension Stone Mining and Quarrying should see large percentage gains, projected to finish with 280 jobs in 2013 from a start of only 11 jobs in 2003.
Government represents the largest regional supersector with 170,074 projected jobs in 2013. Government jobs should increase by 20 percent from 2003 to 2013, led by a projected job gain of 9,682 in State Government. Local Government accounts for more employment than any industry in the region with 60,222 jobs projected in 2013. Most of these Local Government jobs are in public schools. Except for a slight contraction in 2004, the supersector is projected to add jobs in each year of the 10-year period.
Other supersectors anticipating positive job growth rates over the period include Construction (22 percent); Trade, Transportation and Utilities (17 percent); Financial Activities (17 percent); Other Services (14 percent); Information (13 percent); and Manufacturing (8 percent).8
Job growth depends upon a region’s underlying economic structure. That structure includes multiple factors, including natural resources, labor force characteristics and the composition and concentration of the region’s industries.
This latter characteristic, also called clustering, is particularly important since industry clusters give firms within them access to more suppliers and to skilled laborers with valuable knowledge and information.15 The benefits that result from high industry concentrations give a region its competitive edge.16
One tool that can be used to identify industry concentration is the “location quotient.” The location quotient identifies industry concentration by comparing the share of a region’s economy attributable to a specific industry in comparison to the share that same industry accounts for in the nation’s economy.
In essence, the share an industry accounts for in the national economy is seen as the “norm” for that industry, so comparing that norm with its share of a regional economy indicates whether that region tends to have “a lot” or “a little” of a particular industry. Typically, a region will contain “a lot” of industries for which it has some natural or developed competitive advantage, based for instance on a local abundance of a particular resource, a favorable climate, an advantageous natural feature (such as proximity to a port), a highly educated labor force or some other factor.
A location quotient greater than one indicates a high regional employment concentration in an industry compared to the same industry at the national level. This means that the region is “specialized” in that particular industry. A location quotient of less than one indicates that the region’s concentration in the industry is less than the national industry level. In essence, the region is less specialized in that given industry.
Exhibit 4 lists industries in Central Texas region with location quotients exceeding two based on 2008 employment, meaning the region’s share of employment in an industry is at least twice as large as the nation’s share. These industries are grouped according to their respective NAICS supersectors and ranked from the highest to lowest location quotient within each supersector.17
Primary aluminum production manufacturing has the region’s highest location quotient, with a measure of 21.28. In other words, the industry’s level of employment in Central Texas is more than 21 times larger than its national counterpart.
Most Competitive Industries
While location quotients provide important information on regional industry concentrations, they offer only a snapshot – a static measure at a particular point in time. To assess the competitive resilience of a regional industry, a more dynamic measure is needed. One such measure is “shift-share analysis.”
In this analysis, the change in an industry’s regional presence is divided into three components: the portion attributable to the overall growth or decline in the nation’s economy (the national growth effect); that attributable to the difference between the national trend for an industry and the national trend for all industries (the industry mix effect); and that attributable to the region’s competitiveness as a site for the industry (the regional competitiveness effect).
Exhibit 5 lists the Central Texas region’s most competitive industries based on shift-share analysis. The industries are ranked based on their employment change in the regional competitiveness component (and thus the industry’s comparative advantage in the region) between 2002 and 2008.
Despite the fact that national military employment grew at a slower pace than the rest of the national economy (negative industry mix effect) this is not the case for the Central Texas Region. Due to the presence of Fort Hood, the most competitive industry in the region is the military, which increased by 7,359 jobs between 2002 and 2008.
The general medical and surgical hospitals industry was the highest-ranked industry in which all three components of job growth increased. This industry grew by 2,505 jobs during this period, as local factors from the competitiveness effect contributed to 1,431 jobs, or 57 percent, of this increase. The remaining growth was due to a growing national economy and an industry growing faster than its national counterpart. Another similar example is the general warehousing and storage industry, in which local conditions contributed to 95 percent of job growth.
Good Jobs for the Future
Shift-share analysis identifies the region’s most competitive industries – those that possess the best chances for increased employment opportunities. What types of occupations can Central Texans expect to find within these industries? Exhibit 6 presents a list of “good jobs” for the region’s future, grouping them based on their educational requirements.
For the purpose of this analysis, a “good job” is one for which the weighted average of median annual earnings, as reported by the Texas Workforce Commission, exceeds the state’s 2007 per capita personal income level of $37,187.20 In the Central Texas region, 265 occupations pay more than this amount.
Occupations requiring doctoral and professional degrees command the highest annual earnings, with weighted median earnings of $90,758 for the region. Occupations requiring both a college degree and work experience provide the second-highest earnings, with weighted median earnings of $70,524. Occupations requiring a master’s degree provide the third-highest annual earnings, with a weighted median of $51,378.
In the Central Texas region, occupations requiring postsecondary vocational training provide weighted median earnings of $45,376 annually. Occupations requiring an associate degree (without work experience) yield higher earnings than occupations requiring a bachelor’s degree (without work experience). Associate degree occupations offer weighted median earnings of $51,032, while bachelor’s degree occupations offer weighted median earnings of $49,559.
Many occupations that meet the “good jobs” definition do not require a college degree. A number of occupations requiring related work experience, on-the-job-training or postsecondary vocational training also provide good wages. At weighted median earnings of $46,214, jobs requiring work experience but no postsecondary education provide earnings near those requiring a bachelor’s degree.
Occupations with the Most Projected Job Openings, Central Texas Region, 2008-2013
|Rank||Description||2008 Jobs||2013 Jobs||Total Job Openings||Growth||Replacement||2008 Median Annual Earnings|
|2||Combined food preparation and serving workers, including fast food||14,314||16,575||3,643||2,261||1,382||$14,082|
|3||Cashiers, except gaming||11,846||12,420||3,614||574||3,040||$15,496|
|6||Waiters and waitresses||7,192||7,904||2,683||712||1,971||$13,582|
|8||Correctional officers and jailers||5,006||6,032||1,615||1,026||589||$30,285|
|9||Customer service representatives||6,431||7,095||1,559||664||895||$22,298|
|10||Office clerks, general||7,622||8,392||1,469||770||699||$18,325|
|11||Elementary school teachers, except special education||6,113||6,896||1,450||783||667||$39,810|
|12||Janitors and cleaners, except maids and housekeeping cleaners||6,065||6,785||1,312||720||592||$17,763|
|13||Secretaries, except legal, medical, and executive||8,838||9,317||1,179||479||700||$22,526|
|14||Executive secretaries and administrative assistants||5,504||6,162||1,101||658||443||$32,656|
|15||Personal and home care aides||3,590||4,298||1,013||708||305||$13,936|
|16||Secondary school teachers, except special and vocational education||4,192||4,546||973||354||619||$42,278|
|17||General and operations managers||5,383||5,667||928||284||644||$70,533|
|19||Laborers and freight, stock, and material movers, hand||5,431||5,475||868||44||824||$18,699|
|20||Bookkeeping, accounting, and auditing clerks||4,876||5,357||861||481||380||$26,229|
|21||Truck drivers, heavy and tractor-trailer||5,429||5,781||814||352||462||$29,598|
|22||First-line supervisors/managers of retail sales workers||4,285||4,642||811||357||454||$31,242|
|24||Middle school teachers, except special and vocational education||3,388||3,773||753||385||368||$40,570|
|25||Nursing aides, orderlies, and attendants||4,784||5,320||752||536||216||$18,678|
Sources: Economic Modeling Specialists Inc., Texas Workforce Commission and Texas Comptroller of Public Accounts.
Exhibit 7 lists 25 occupations expected to have the highest number of job openings between 2008 and 2013. The job openings are divided between newly created jobs (growth) and the replacement of existing jobs. Military occupations top the list, with 7,420 job openings between 2008 and 2013 and median annual earnings of $42,432.25
Sixteen of the 25 occupations require short-term or moderate-term on-the-job training. These provide median annual earnings ranging between $13,582 and $32,656. Nurses, with annual earnings over $54,000, require an associate’s degree. Three of the occupations – elementary, middle and secondary school teachers – require a bachelor’s degree.
One of the many functions of the Texas Comptroller of Public Accounts is to analyze demographics, the labor force and other economic factors needed to generate local economic growth, and provide this information to local governments and other groups. Through its Texas EDGE (Economic Data for Growth and Expansion) program, the agency can identify occupational and industry trends and their effects on local and regional economies.
Since August 2008, the Comptroller’s office has responded to 454 Texas EDGE requests from city and county government officials, economic development corporations, private businesses and members of the media. These requests cover many topics including demographics, economic development, economic modeling and taxes.
The Comptroller’s office also can provide local demographic data, identify business clusters and provide maps of regional roadways and waterways. For assistance, please visit www.window.state.tx.us/texasedge or e-mail Texas EDGE at email@example.com.
The Comptroller also provides local governments with information about tax-related programs and helps them identify opportunities to raise funds for economic development efforts through property, sales and franchise tax revenues, exemptions and credits. The agency also provides information on special assessments and other opportunities related to disaster relief.
The Comptroller’s Texas Ahead web portal provides information on tax programs and incentives, best practices and economic indicators, as well as reports and publications such as our new report on Texas work force training, Texas Works. Texas EDGE, described above, also allows site visitors to build customized models using region-specific data of their choosing.
Finally, the Comptroller’s State Energy Conservation Office (SECO) can help local governments slash their energy costs and adopt cost-effective clean energy technologies. SECO offers local governments a free preliminary energy audit of their facilities. These audits provide recommendations for reducing electricity consumption by improving the efficiency of heating and air conditioning systems and lighting.
PHOTO: Scott & White
All links were valid at the time of publication. Changes to web sites not maintained by the office of the Texas Comptroller may not be reflected in the links below.
- 1 Interview with John Larch, vice president and general manager, Zodiac Enterprises, Caldwell, Texas, February 5, 2009.
- 2 Interview with Billy Clemons, administrator, City of Caldwell, Caldwell, Texas, February 4, 2009.
- 3 Interview with John Larch, vice president and general manager, Zodiac Enterprises.
- 4 U.S. Bureau of Labor Statistics , “NAICS Supersectors for CES Program,” pp. 1-2, http://www.bls.gov/sae/saesuper.htm. (Last visited March 17, 2009.)
- 5 Susan Kirr, “A Tale of Two Cities: Having the Best of Times in Bryan and College Station,” Texas Highways (July 2008) , p. 58; and City of College Station, “Messina Hof Winery,” p. 1, http://www.cstx.gov/home/index.asp?page=173. (Last visited March 18, 2009.)
- 6 Messina Hof Winery & Resort, “Texas Agriculture Commissioner Todd Staples Kicks Off Messina Hof Harvest Celebration,” http://www.messinahof.com/docs/2008_6_commissioner_harvest.pdf; and HoustonWine.com, “New State Advisory Board to Guide Future Development of Texas Wine Industry: Messina Hof Winemaker & CEO Appointed as Chairman,” p. 1, www.houstonwine.com/new_state_advisory_board_to_guid.htm, (Last visited April 2, 2009.); and Interview with Bobby Champion, Texas Department of Agriculture, for Texas Wine Month, October 10, 2008, http://www.agr.state.tx.us/agr/media/media_render/0,1460,1848_17080_25727_0,00.html?clipContentId=25723. (Last visited April 6, 2009.)
- 7 Thomson Reuters, “Messina Hof Winery and Resort Hosts 31st Annual Harvest Celebration,” p. 1, http://www.reuters.com/article/pressRelease/idUS170303+23-Jun-2008+BW20080623. ; and Messina Hof Winery & Resort, “Messina Hof Winery and Resort Headlines the Texas Hill Country Wine and Food Festival,” Bryan, Texas, http://www.messinahof.com/docs/2008_4_Hill_Country_W&F.pdf. (Last visited March 18, 2009.) (Press release.)
- 8 Data provided by Economic Modeling Specialists Inc., (EMSI). The “Other Services” sector represents all industries covered under the two-digit NAICS code 82. These are industries primarily engaged in the provision of repair and maintenance services for automotive, electronic, commercial and industrial machines and equipment. The sector also includes personal services such as laundry, dry cleaning, hair, nail, and skin care, funeral parlors and organizations that have religious, social advocacy, civic, political and business purposes.
- 9 Interview with Dave Zuber, president, Fairfield Industrial Development Corporation, Fairfield, Texas, February 6, 2009.
- 10 Interview with Michael Gokey, city manager, Fairfield, Texas, February 6, 2009.
- 11Blue Bell Creamery, “Our History,” pp. 1-2, http://www.bluebell.com/The_Little_Cremery/history.aspx. (Last visited March 20, 2009.)
- 12 Interview with Bill Weiss, public relations manager, Blue Bell Ice Cream, Brenham, Texas, April 3, 2009.; and Clint Shields, “Lone Star Favorites: Texas Giants that Sprang from Simple Ideas,” Fiscal Notes (October 2008), p. 1, http://www.window.state.tx.us/comptrol/fnotes/fn0810/treats.html. (Last visited April 6, 2009.)
- 13 Blue Bell Creamery, “What We’re Crankin’ Out,” p. 1, http://www.bluebell.com/What_Were_Crankin_Out.aspx. (Last visited March 20, 2009.)
- 14 Blue Bell Creamery, “Visiting Blue Bell,” p. 1, http://www.bluebell.com/The_Little_Creamery/Visiting_Blue_Bell.aspx. (Last visited March 20, 2009.)
- 15 National Governors Association, A Governor’s Guide to Cluster-Based Economic Development (Washington, D.C., 2002), p. 9, http://www.eda.gov/ImageCache/EDAPublic/documents/pdfdocs/nga_5fclusters_2epdf/v1/nga_5fclusters.pdf. (Last visited March 17, 2009.)
- 16 Laila Assanie and Mine Yücel, “Industry Clusters Shape Texas Economy,” Southwest Economy (September/October 2007), pp.1-8, http://dallasfed.org/research/swe/2007/swe0705b.cfm. (Last visited March 17, 2009.)
- 17 U.S. Bureau of Labor Statistics, “NAICS Supersectors for CES Program.”
- 18 Robert Stinson, “Toyota to Open Temple Facility,” Temple Daily Telegram (November 16, 2007), http://www.tdtnews.com/story/2007/11/16/45003. (Last visited March 18, 2009.)
- 19 Kevin M. Smith, “Area Work Force Good Fit for Toyota Jobs,” The Killeen Daily Herald (January 13, 2008), http://www.kdhnews.com/news/story.aspx?s=22054, (Last visited March 18, 2009.); and interview with Jonathan Scott, director of business development, Temple Economic Development Corporation, Temple, Texas, March 26, 2009; and Robert Stinson, “Toyota to Open Temple Facility,” Temple Daily Telegram.
- 20 U.S. Bureau of Economic Analysis, “State Personal Income 2007,” Washington, D.C., March 26, 2008, p. 6, http://www.bea.gov/newsreleases/regional/spi/2008/pdf/spi0308.pdf. (Last visited March 18, 2009.) (Press release.)
- 21 The Antique Rose Emporium, “Guide to Antique Roses,” p. 1, http://www.roseinfo.com/. (Last visited March 19, 2009.)
- 22 The Antique Rose Emporium, “Full List Roses by Type,” pp. 1-28, http://www.antiqueroseemporium.com/main.html. with Comptroller calculations.; and The Antique Rose Emporium, “About the Antique Rose Emporium,”, p. 1 http://www.roseinfo.com/aboutus.html. (Last visited March 19, 2009.)
- 23 The Antique Rose Emporium, “Brenham Event Rentals,”, p. 1, http://www.antiqueroseemporium.com/rentals.html. (Last visited March 19, 2009.)
- 24 Interview with G. Michael Shoup, owner, Antique Rose Emporium, Independence, Texas, April 2, 2009.
- 25 Data provided by EMSI; and selected median annual earnings were estimated by taking a weighted average of median annual earnings in the three workforce development areas (WDAs) comprising the Central Texas region; and data provided by the Texas Workforce Commission.
- 26 The Shops of River Square Center, “The Shops of River Square Center,”, p. 1, http://www.shopsofriversquarecenter.com/index.html. (Last visited March 18, 2009.)
- 27 CBL & Associates Properties, “CBL 2007 Custom Demographic Comparison: Richland Mall – Waco, TX,” p. 4, http://www.richlandmall.com/shop/richland.nsf/DemographPDFWeb/Demographics/, (Last visited March 18, 2009.); and Richland Mall, “Fact Sheet – Richland Mall,” p. 1, http://www.richlandmall.com/shop/richland.nsf/facts. (Last visited March 18, 2009.)