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Austin’s Manufacturing Industry

11.13.2011

I weighed in on construction and manufacturing in Austin for a story that ran today in the Austin American-Statesman:

Overall, manufacturing and construction are important sectors of the Austin economy, said Brian Kelsey, an economic development consultant for Civic Analytics, an Austin-based economic development consulting firm.

In manufacturing, firms are getting smaller and more efficient, he said. At the peak of the last business cycle in 2005-06, companies were employing about 45 workers, on average, he said. That’s down to 36 or 37 per company.

“Firms are getting leaner,” Kelsey said. “They’re getting more efficient and obviously doing more with less.”

As for construction, he said he believes that the sector will “tread water” for awhile.

Read the rest here: Though stung by recession, manufacturing, construction still vital segments of Austin’s economy. This story is part of an excellent series the Statesman is doing called Austin Economy 101.

Picking up on the point I made about productivity, here’s another important part of the story that didn’t run in the Statesman: In 2001, the total value (Real GDP in 2005 dollars) of the Austin economy was approximately $56 billion, of which manufacturing represented about 9 percent, or $5 billion. Between 2001 and 2010, Austin’s total GDP grew to approximately $82 billion, an increase of nearly 50 percent. Manufacturing, by contrast, grew by 219 percent to approximately $16 billion and now makes up about 20 percent of Austin’s total GDP.

Meanwhile, manufacturing employment in Austin declined from 76,346 full-time jobs in 2001 to 47,514 full-time jobs in 2010, and real wages (2010 dollars) increased by only 9 percent.

219 percent growth in total value, nearly 29,000 jobs lost, and what amounts to a 1 percent raise each year for workers. The challenge for economic and workforce developers these days in a nutshell.