Manufacturing 2.0: A More Prosperous California

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Texas


Texas' manufacturing real GDP totaled $143.1 billion, contributing 15.8 percent to the state’s real GDP—second to California—or 9.1 percent of the U.S. manufacturing real GDP in 2007. The state’s manufacturing real GDP climbed 54 percent from 2000 to 2007. Industrial research and development expenditures in the state have grown by 38.8 percent from 2000 to 2007. However, manufacturers’ capital spending declined by more than the U.S. average.

The second-largest manufacturing state in the nation, Texas employed 7 percent of the nation’s manufacturing workers in 2007. The state’s manufacturers provided more than 934,400 jobs, adding more than 43,000 jobs since 2004, when Texas manufacturing employment bottomed out. Though the state registered a net loss in manufacturing jobs from 2000 and 2007, both high-tech and non-high-tech manufacturing rebounded after 2004, with non-high-tech jobs growing faster. Despite its large manufacturing base, Texas’ share of manufacturing employment, especially in high-tech manufacturing, is slipping. Its piece of U.S. high-tech manufacturing employment was 7.46 percent in 2007, higher than the national average.

Because of the number of workers in high-tech manufacturing, Texas’ average manufacturing wage was higher than in most states. Its average manufacturing wage was $60,400 in 2007, a 30 percent increase from 2000 and a 105 percent surge from 1990. The value added per production worker was more than $347,557 in 2007, more than the California and U.S. averages.

Manufacturing employment index (2000-2007)
State 2000 2001 2002 2003 2004 2005 2006 2007
California 100.00 96.01 88.08 83.25 82.11 81.10 80.31 78.98
Texas 100.00 96.15 88.83 84.27 83.42 84.02 86.56 87.49
United States 100.00 95.22 88.37 84.03 82.91 82.40 82.00 80.41

Sources: U.S. Bureau of Labor Statistics, Moody's Economy.com, Milken Institute.

Top five indicators
Indicator United States
Value
TX
Value
%
Change
Peer State
Rank
Real gross state product (US$ billions) $11,523.9 $903.4 24.2% 3
Per capita personal income (US$) $38,615 $37,083 31.0% 1
Total exports of goods (US$ billions) $1,162.5 $168.2 62.0% 5
Manufacturing's share of real GDP (%) 13.6% 15.8% 23.8% 2
Real manufacturing output per worker (US$ thousands) $113.6 $153.1 75.7% 2

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Economic climate indicators
Indicator United States
Value
TX
Value
%
Change
Peer State
Rank
Real gross domestic product (US$ billions) $11,523.9 $903.4 24.2% 3
Total nonfarm employment (thousands, SA) $13,7604.3 $10,395 10.2% 2
Total exports of goods (US$ billions) $1,162.5 $168.2 62.0% 5
Per capita personal income (US$) $38,615 $37,083 31.0% 1
Median household income (US$) $50,740 $47,563 19.1% 5

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Business climate indicators
Indicator United States
Value
TX
Value
%
Change
Peer State
Rank
Corporate income tax rate 15.0% -35.0% 1.0% -- 2
Individual income tax rate 10.0% -35.0% 0% -- 1
Property tax rate 13.8% 2.57% -- 8
Sales tax rate 0% 6.25% 0.0% 5
Employer unemployment insurance tax rate 0.66% 0.45% 21.6% 2
Total state-local tax burden rate 9.9% 8.3% 3.8% 1
Per capita total state-local taxes paid (US$) $4,223 $3,428 38.3% 2
Government debt as % of GDP 65.5% 2.1% -19.2% 1
Per capita government spending (US$) $14,327 $3,791 30.8% 1
Nonfarm establishments (latest 2006) 7,601,160 $509,080 8.0% 6

Sources: Bureau of Economic Analysis, The Tax Foundation, U.S. Census Bureau, U.S. Office of Management and Budget, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.

Manufacturing indicators
Indicator United States
Value
TX
Value
%
Change
Peer State
Rank
Manufacturing share of real GDP 13.6% 15.8% 23.8% 2
High-tech manufacturing share of real GDP 4.8% 6.3% 86.1% 3
Manufacturing employment (thousands) 13,882.6 934.4 -12.5% 4
High-tech manufacturing employment (thousands) 2,468.7 184.1 -23.1% 8
Share of U.S. high-tech manufacturing employment 2.0% (U.S. avg.) 7.46% -4.5% 8
Manufacturing wage per employee (US$) $53,804 $6,0421 30.3% 1
Manufacturers' capital expenditures (US$ billions) $135.8 $12.8 -16.3% 5
Industrial R&D expenditures (US$ billions, 2005) $226.2 $12.4 38.8% 5
Real manufacturing output (US$ billions) $1,571.7 $143.1 53.9% 2
Real manufacturing output per worker (US$ thousands) 113.6 153.1 75.7% 2
Value added per production worker (US$) $249,139 $347,557 74.5% 2
Exports of manufactured goods (US$ billions) $1,022.1 $158.2 59.5% 5

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, The National Science Foundation, U.S. Census Bureau, Milken Institute.
Note: Data are 2007 figures, unless stated otherwise. The rankings are among the eight peer states, 1 = best and 8 = worst, based on the growth rate between 2000 and 2007.
Leading business and economic indices
Indicator Peer State
Rank
National
Rank
State Business Tax Climate Index (Tax Foundation) 1 8
Best & Worst States [to do business] Survey (Chief Executive Magazine) 1 1
Competitiveness Index (Beacon Hill Institute) 6 20
Economic Competitiveness Index (American Legislative Exchange Council) 1 1
2007 State and Local Tax Burden (Public Policy Institute of New York) 1 10
Economic Freedom Index (Pacific Research Institute) 4 17
Small Business Survival Index (Small Business & Entrepreneurship Council) 2 6
2007 Cost-of-Doing-Business Index (Milken Institute) 5 26
State New Economy Index (Kauffman Foundation) 6 18
State Technology & Science Index (Milken Institute) 6 20

Note: Indices cited were published in 2008, unless otherwise stated. Some index rankings results were reversed from published rank in order to make them consistent across the different indices as presented here. The rankings are among the eight peer states, 1 = best and 8 = worst.
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