section 5 texas regional location quotient matrix analysisthe matrix shows the industries with the...

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Texas Regional Location Quotient Matrix Analysis section | 5 Where will the jobs come from? Where are the Texas comparative advantages? In previous sections of this analysis we examined the question of the role of small and new businesses in Texas job creation. In the final section of this monograph we present a variation of this theme by exploring the importance of regional comparative advantage in job creation. It is beyond the scope of this paper to show data on small business job creation by industry sector or in various regional economies. But no discussion would be complete without exploring the role of regional comparative advantage in job creation. Every region of Texas has its own unique industry structure. Job creation, whether it comes from new or existing businesses, is most likely to be linked to the economic strengths or growth poles of each region. In fact, in the short and medium term, most future jobs will come from the same industries they came from yesterday. The composition and magnitude of job growth could change based on a number of factors, but many of these phenomena are beyond our ability to forecast them. Here are four key ways that job growth patterns might change in a regional economy: a) Change in regional comparative advantage; e.g. discovery of oil shale deposits, water depletion, etc. For example, a railroad spur could allow freight in and out of a community, or a new highway project expands access to a local industrial park. Changes in infrastructure and regional comparative advantage can alter the composition and trajectory of employment growth. A current illustration of this is the discovery of shale oil in the area south of San Antonio referred to as the Eagle Ford Shale region, which has already proven to be an economic boon to an otherwise poor, rural area that will significantly affect regional job growth. b) Positive or negative externalities; e.g. weather related natural disaster. The 2011 drought in Texas not only hurt farmers and ranchers, but negatively affected companies throughout the agribusiness supply chain. Hurricanes, tornados and other catastrophic weather events often reshape the economies of entire regions. c) Major change in regulatory climate or government policy; e.g. requirement for federal auto fuel economy or emissions standards, renewable energy stimulus. Not every industry is equally affected by government regulation, but government policies, standards and investments can have a major influence on local job growth. d) Major facility relocation (in or out) or layoffs. Major dislocations are especially impactful in smaller communities. A plant closing that utilizes many local suppliers may have an even larger ripple effect in a local economy. 40 | SECTION 5

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Page 1: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Texas Regional Location Quotient Matrix Analysis

section | 5

Where will the jobs come from?

Where are the Texas comparative advantages?

In previous sections of this analysis we examined the question of the role of small and new businesses in Texas job creation. In the final section of this monograph we present a variation of this theme by exploring the importance of regional comparative advantage in job creation. It is beyond the scope of this paper to show data on small business job creation by industry sector or in various regional economies. But no discussion would be complete without exploring the role of regional comparative advantage in job creation. Every region of Texas has its own unique industry structure. Job creation, whether it comes from new or existing businesses, is most likely to be linked to the economic strengths or growth poles of each region.

In fact, in the short and medium term, most future jobs will come from the same industries they came from yesterday.

The composition and magnitude of job growth could change based on a number of factors, but many of these phenomena are beyond our ability to forecast them. Here are four key ways that job growth patterns might change in a regional economy:

a) Change in regional comparative advantage; e.g. discovery of oil shale deposits, water depletion, etc. For example, a railroad spur could allow freight in and out of a community, or a new highway project expands access to a local industrial park. Changes in infrastructure and regional comparative advantage can alter the composition and trajectory of employment growth. A current illustration of this is the discovery of shale oil in the area south of San Antonio referred to as the Eagle Ford Shale region, which has already proven to be an economic boon to an otherwise poor, rural area that will significantly affect regional job growth.

b) Positive or negative externalities; e.g. weather related natural disaster. The 2011 drought in Texas not only hurt farmers and ranchers, but negatively affected companies throughout the agribusiness supply chain. Hurricanes, tornados and other catastrophic weather events often reshape the economies of entire regions.

c) Major change in regulatory climate or government policy; e.g. requirement for federal auto fuel economy or emissions standards, renewable energy stimulus. Not every industry is equally affected by government regulation, but government policies, standards and investments can have a major influence on local job growth.

d) Major facility relocation (in or out) or layoffs. Major dislocations are especially impactful in smaller communities. A plant closing that utilizes many local suppliers may have an even larger ripple effect in a local economy.

40 | SECTION 5

Page 2: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Moreover, there are specific reasons why each regional economy has a unique industry mix. In addition to population growth, many of these root causes relate to distinctive natural resource endowments, location advantages, such as access to a deep water port or a highway crossroad, availability of a highly skilled labor force or perceptions of quality of life. Unless there is an erosion or depletion of these comparative advantages, future job growth is likely to be driven by these same advantages.

Texas Has a Competitive AdvantageTexas is expected to experience employment growth due to competitive advantages

in both the number of growth industries and the growing numbers of skilled workers in the state, according to a team of economists at banking giant Wells Fargo. In an April 2011 report titled “Employment Dynamics and State Competitiveness,” the Wells Fargo economic researchers analyzed U.S. Department of Labor data to identify which industries nationwide had been adding jobs from 1990 to 2010. The researchers then identified which states had job growth in the growth industries. Texas made the list in reference to several identified growth industries. The Wells Fargo economic researchers stated in their report:

“States with a large number of high-growth industries that also have a large skilled workforce will be at a greater competitive advantage. This would tend to favor states, such as Georgia, North Carolina, Arizona, Virginia and Texas, which not only have a large supply of skilled workers but have also been successful at attracting such workers from other parts of the nation.”

The Wells Fargo team concluded that the major industries that posted the best job growth and had a growing share of the total employment in the United States over the past two decades were:

1) Health care and social assistance2) Professional and technical services3) Finance and insurance4) Administrative and waste services

These same industries are also adding jobs in Texas. According to the Wells Fargo team, this should translate into future overall job growth in the state.

Job Growth Will Be Concentrated in Metro Areas

Texas will continue to add jobs but almost all of that job growth will come in the largest metropolitan areas, say economists at IHS Global Insight. The IHS Global Insight team states that major metropolitan areas in Texas have demonstrated above-average job growth in recent years. IHS Global Insight analysts and economists say they expect that job growth in the metro areas should continue to expand at a faster rate than the rural areas of Texas.

In an April 2011 report, IHS Global Insight economists projected that the Austin-Round Rock-San Marcos metropolitan area should experience annual employment growth from 2012 to 2015 of 3.2%, which would be the second fastest growth rate in the country. In addition, the report predicted that both the Dallas-Fort Worth-Arlington metro area and the Houston-Sugar Land-Baytown metro area each would post annual employment growth rates of 2.7%, which would rank those two metro regions #11 and #12 for fastest growth rates in the nation.

“States with a

large number

of high-growth

industries that

also have a large

skilled workforce

will be at a greater

competitive

advantage.

TEXAS REGIONAL LOCATION QUOTIENT | 41

Page 3: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Comparative Advantages Using The New Identifier For Texas and its Regions

Within this context of job creation and job elimination data, there are new ways of looking at industries that are best positioned in a state or region for adding jobs due to a comparative advantage. The LMCI researchers in the Texas Workforce Commission have calculated Location Quotients to identify the high and low concentrations of workers in specific industries inside each of the state’s 28 Local Workforce Development Areas. (See www.lmci.state.tx.us/LQbubblecharts for detailed matrix maps for each regional workforce development area in Texas.)

To show these competitive advantages around concentrations of workers in an industry, the LMCI team has created the following Texas Location Quotient Matrix maps for several key regions of the state. The matrix shows four different labor market dimensions to trigger the thinking of Texas business and workforce policy makers relative to economic development. The following explanation lays the groundwork for understanding these new Texas Location Quotient Matrixes.

1) Location Quotient Location quotient measurement is shown with the X axis. A location quotient identifies the concentration of workers in an industry for a state or region compared with the nation. Industries on the right side of the matrix have an especially high concentration of workers relative to the United States. And industries on the left side of the matrix have especially low concentrations of workers relative to the rest of the nation. The matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas have a comparative advantage or disadvantage.

The vertical line inside the matrix indicates average location quotient. While the average location quotient score is a 1.0, this matrix is measuring the location quotient scores logarithmically to illustrate the difference. So industries to the right of the vertical line have especially high concentrations of workers. In essence, large location quotient = comparative advantage.

2) Average Weekly Wage Wages are shown with the Y axis. The Y axis measures the average weekly wage for workers in an industry. So industries in the top part of the matrix pay workers higher wages. Industries in the lower part of the matrix pay lower wages.

The horizontal line inside the matrix is the average weekly wage across all industries. So any industry above the horizonal line has above average wages.

3) Size of Industry Employment Employment size of an industry is shown by the size of that industry’s bubble. The size of the bubble indicates the total employment as of first quarter 2011, so the larger the bubble the more workers are in that industry. Bubbles also illustrate where key industries show up in the matrix.

4) Employment Change Within An Industry Change in the number of workers in an industry is shown by the color of the bubble. Colors of the bubbles indicate employment growth or shrinkage in Texas. This total industry employment growth or shrinkage change was measured from just before and just after the Great Recession (first quarter 2006 to first quarter 2011). To illustrate the change in an industry’s net employment across the Great Recession, shades of blue are used in the bubble. (see explanation on the next page)

42 | SECTION 5

Page 4: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

− 1 .0 − 0 .5 0 .0 0 .5 1 .0 1 .5 2 .0

$0

1,000

$2,000

$3,000

$4,000

$5,000

Oil & Gas Extraction

Colleges and Universities

Motion Pictures

Vocational Rehabilitation Services

Pharmaceutical & Medicine Manufacturing

Basic Chemical Manufacturing

Medical Equipment & Supplies Manufacturing

Location Quotient (logarithmic)LLooccatioo hmiccc)

Regional Average Weekly Wage (All Industries):

$935

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

Aver

age

Wee

kly

Wag

e (A

WW

)

Selected Texas Industries by Location Quotient and Average Weekly Wage, 1Q 2011

The Texas Location Quotient Matrix (sample with selected industries)

Attractive Dominant

Ordinary Significant

How To InterpretThe quadrants of the matrix are labeled to help identify strengths and opportunities for decision makers in a state or a region. In the matrix map illustration, the LMCI team has also designated each quadrant for better understanding using the following labels.

4) Ordinary – this quadrant is for industries with low concentrations of workers earning lower pay. These can often be common or service industries and due to their low pay and lack of dominance they offer little comparative advantage and are often last to receive economic development attention.

3) Significant – this quadrant is for industries with a high concentration of workers yet at lower pay. These industries tend to be significant contributors to a region’s employment base and offer the potential to become quick job creators.

1 ) Dominant – this quadrant is for industries that have a strong concentration of workers as well as high-paying jobs. These industries tend to be growth poles in a state or region.

2) Attractive – this quadrant is for industries with high wages yet relatively low concentrations of workers. While these industries are not dominant in a state or region, these are job sectors that are still providing high wages and are critical to a state’s or region’s wealth creation, which makes them enticing to economic developers.

JJJoooShades of blue in the bubbles indicate

employment growth or shrinkage in Texas industry had net employment growth of more than 10%.

industry had net employment growth of 2-10%.

TEXAS REGIONAL LOCATION QUOTIENT | 43

industry had net employment loss of 2-10%.

industry had net employment loss of more than 10%.

industry growth was neutral so that employment was within +/-2% over the time period.

Page 5: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Selected Texas Industries by Location Quotient and Average Weekly Wage, 1Q 2011

− 1 .0 − 0 .5 0 .0 0 .5 1 .0 1 .5 2 .0

$0

1,000

$2,000

$3,000

$4,000

$5,000

Oil & Gas Extraction

Colleges and Universities

Motion Pictures

Vocational Rehabilitation Services

Pharmaceutical & Medicine Manufacturing

Basic Chemical Manufacturing

Medical Equipment & Supplies Manufacturing

Location Quotient (logarithmic)LLoccatioo hmiccc)

Regional Average Weekly Wage (All Industries):

$935

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

Aver

age

Wee

kly

Wag

e (A

WW

)

Attractive Dominant

Ordinary Significant

44 | SECTION 5

Page 6: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

To make the Texas Location Quotient Matrix more understandable, some specific industries are used below to explain how the matrix can be interpreted.

What does it mean? Looking at specific industry examples may help readers grasp this new matrix.

Oil & Gas Extraction – This industry is in the Dominant quadrant for a couple reasons. First, the oil & gas extraction industry has an especially high concentration of workers in Texas so it has a high location quotient, which would put it on the right side of the matrix. Second, the oil & gas extraction industry has average weekly wages well above the state average of $935, which would put it high in the upper half of the matrix. Also, the oil & gas extraction industry employs many workers in Texas, hence it has the larger bubble. And that bubble is dark blue because the oil & gas extraction industry added a lot of workers (16,347 more jobs or a 24% increase from first quarter 2006 to first quarter 2011) in Texas through the Great Recession.

Basic Chemical Manufacturing – This industry is also in the Dominant quadrant because it has above average wages (top half) and high concentration of workers (so high location quotient to put it on the right half of the matrix). The medium size bubble indicates the relative size of the industry in Texas based on the number of workers employed. Also, the basic chemical manufacturing industry bubble is colored light blue because that industry lost workers in Texas during the Great Recession.

Vocational Rehabilitation Services – This industry is in the Ordinary quadrant because it has below average wages and low concentrations of workers. This industry has a small location quotient so its bubble is located on the left side of the matrix – hence Texas does not have a strong comparative advantage in the vocational rehabilitation services field. Also important is that the vocational rehabilitation services industry has a medium blue bubble as this industry lost a lot of jobs in Texas during the Great Recession.

Motion Pictures – Texas has a modest movie making industry but it is smaller than most

other states so it has a low location quotient and its bubble is on the left side of this matrix. The Texas motion picture industry also has low pay, which is why its bubble is located so far below the average weekly wage line. All of those reasons are why the Texas motion picture industry is located in the Ordinary quadrant on this matrix. Also, the Texas motion picture industry’s bubble is white, indicating the employment level was neutral and didn’t experience much hiring nor many layoffs during the Great Recession.

Pharmaceutical and Medicine Manufacturing – This industry has a relatively small number of workers in Texas (small bubble), has above average wages (bubble located above average wage line in upper half of matrix), and does not have high concentrations of workers compared with the rest of the country (bubble located on left side of matrix). The high wages but lack of dominance for the pharmaceutical and medicine manufacturing industry in Texas puts this industry in the Attractive quadrant. Texas does not have a comparative advantage with this industry but its high wages make it enticing to economic developers. Also, this industry did not grow but did not shrink employment in Texas during the Great Recession resulting in a white bubble.

Colleges and Universities – This industry employs a lot of people in Texas – hence the giant bubble. Yet Texas is at the national average for concentration of workers in this industry, which means that Texas does not have a comparative advantage in the higher education field but nor is Texas weak in this field. The college and universities bubble is dark blue because this industry added a lot of jobs in Texas during the Great Recession. This is an example of how the Texas Location Quotient Matrix can stimulate thinking and discussion as observers can readily realize that the data do not show that Texas has strong advantages in the field of higher education and that Texas colleges and universities recently have stopped adding workers.

TEXAS REGIONAL LOCATION QUOTIENT | 45

Page 7: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

−1.0 −0.5 0.0 0.5 1.0 1.5 2.0

$0

$1,000

$2,000

$3,000

$4,000

Oil & Gas Extraction

Pipeline Transportation of Natural Gas

Support Activities for Mining

Ag., Construction & Mining Machinery

Petroleum & Coal Products Manufacturing

Basic Chemical Manufacturing

Home Health Care Services

Utility System Construction

Heavy Civil Engineering Construction

Nonresidential Building Construction

Specialty Hospitals

Machinery & Equipment Rental & Leasing

Petroleum Merchant Wholesalers

Office AdministrativeServices

Metal & Mineral Merchant Wholesalers

Colleges & Universities

Vocational RehabServices

Electronic Shopping & Mail-Order HousesOutpatient

Care Ctrs

Motion Pictures

Support Activities for Crop Production

Management of Companies & Enterprises

Residential Mental Health Facilities

Individual & Family Services

Medical Equipment & Supplies Mfg

Scientific R&D Services

Pharmaceutical & Medicine Manufacturing

MotorVehicle Parts Manufacturing Texas AWW

$935

Management & Technical Consulting Services

Location Quotient (logarithmic)Loccatio hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

MATRIX 1 Texas Statewide Location Quotient Matrix 1Q 2011

Attractive Dominant

Ordinary Significant

46 | SECTION 5

Page 8: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Matrix 1 shows the top dozen industries statewide in Texas with the highest location quotients (those bubbles on the right side of the graph). Matrix 1 is a more complete matrix than the earlier example. Matrix 1 also shows the dozen industries with the lowest location quotient (those bubbles on the left side of the graph). These new Texas Location Quotient Matrixes are designed to help Workforce Development Area board members and local economic developers better understand the dynamics of their regional economy. Location quotients also show the “core competencies” of a region’s workforce.

And like most business matrixes, the upper right quadrant is the sweet spot.

The upper right quadrant is where the high-paying and high-concentration jobs are for a region. Some localized Texas Location Quotient Matrixes follow for specific Local Workforce Areas.

Only industries that had at least 0.09% of the employment in the state or in the related workforce development area were selected for the matrix ranking. This filtered out the tiniest industries.

Not surprisingly, Matrix 1 shows that Texas has concentrations of workers in the growth areas of oil & gas extraction, natural gas pipelines and support services for the oil & gas industry (all in the upper right quadrant) – which also are all higher paying industries. Meanwhile, Texas has low relative concentrations of workers in shrinking industries like motor vehicle parts manufacturing, medical equipment making, scientific research, vocational rehabilitation services and movie making.

The following matrix graphs show the strong and weak industries for 5 of the local workforce development areas across Texas. Each matrix shows the location quotient analysis to identify which industries have high and low concentrations of trained workers since 2006 and which of those industries has been adding or losing jobs since that time. In other words, each matrix shows the industries that have a comparative advantage and the corresponding job creation trend since just before the Great Recession in Texas.

Sabine

Shelby

San A

ugustine

Panola

Harrison

Marion

Cass

Bowie

Angelina

Nacog-doches

Morris

UpshurCamp

Red River

Titus

Smith

Rusk

Cherokee

Gregg

Hopkins

Wood

Franklin

LeonHouston

Anderson

Henderson

Rains

Van Zandt

Delta

LamarFannin

Freestone

Hunt

New

ton

Jasper

Orange

Jefferson

Hardin

Tyler

Liberty

Polk

Galveston

Chambers

San Jacinto

Trinity

Harris

Waller

Montgomery

Wharton

Matagorda

Brazoria

Fort Bend

Grimes

WalkerMadison

Colorado

Austin

Washington

Burleson

MilamBrazos

JacksonVictoria

CalhounGoliad

Aransas

Refugio

Fayette

Lee

Bastrop

Lavaca

Rockwall

Kaufman

Robertson

Lime-stone

Ellis

Dallas

Hill Navarro

Collin

Grayson

Denton

Falls

McLennan

Johnson

Tarrant

CookeMontague

Wise

Bosque

Somervell

Gonzales

DeWitt

JimWells

Live Oak SanPatricio

Kleberg

Nueces

Williamson

BellBurnet

Hidalgo

Cameron

Willacy

Karnes

Wilson

Bee

Guadalupe

CaldwellComal

Hays

Travis

KenedyBrooks

Atascosa

Bexar

Duval

Gillespie

Kendall

Blanco

McMullenLaSalle

JimHogg

Starr

Kimble

Mason Llano

Menard

Zapata

Medina

Frio

KerrEdwards

BanderaReal

Webb

Dimmit

Kinney Uvalde

ZavalaMaverick

Parker

Erath Hood

PaloPinto

Coryell

Lampasas

Hamilton

ComancheBrown

Mills

Eastland

Stephens

Callahan

Shackel- ford

Taylor

McCulloch

Concho

SanSaba

RunnelsColeman

JonesFisher

Tom Green

Coke

Scurry

Mitchell Nolan

Sutton

Val Verde

SchleicherCrockett

SterlingGlasscock

ReaganIrion

Howard

Dawson Borden

ClayWichita

Archer

Young Jack

Baylor

Wilbarger

Throck-morton

Childress

Hardeman

King

Foard

Knox

Stonewall Haskell

Hemphill

Wheeler

Collings- worth

Roberts

Lipscomb

CottleMotley

Dickens

OchiltreeHansford

Briscoe Hall

Donley

Gray

Hutchinson

Garza Kent

Crosby

Floyd

Potter

Randall

Carson

Armstrong

Moore

Sherman

Hale

Swisher

Lubbock

Castro

Bailey Lamb

Hartley

Dallam

Oldham

Deaf Smith

Parmer

Lynn

Martin

Midland

Upton

HockleyCochran

TerryYoakum

Terrell

Gaines

Andrews

Crane

Winkler Ector

Pecos

Culberson Loving

WardReeves

Brewster

Jeff Davis

Presidio

El Paso Hudspeth

Workforce Development Areas

1

2 3

45 6

725

89

10

11

12

27 20

2122

19

2814

15

26

13

16 17

18

23

24

Alamo-20Brazos-16Cameron Co.-24Capital Area-14Central Texas-26Coastal Bend-22Concho Valley-12Dallas-6Deep East Texas-17East Texas-8Golden Crescent-19

Middle Rio Grande-27North Central Texas-4North East Texas-7North Texas-3Panhandle-1Permian Basin-11Rural Capital Area-15Southeast Texas-18South Plains-2South Texas-21Tarrant Co.-5

Webb

Dimmit

Prepared by the Labor Market Information Department, TWC

Alamo-20Brazos-16Cameron Co.-24Capital Area-14Central Texas-26Coastal Bend-22Concho Valley-12Dallas-6Deep East Texas-17East Texas-8Golden Crescent-19Gulf Coast-28Heart of Texas-13Lower Rio Grande-23

Middle Rio Grande-27North Central Texas-4North East Texas-7North Texas-3Panhandle-1Permian Basin-11Rural Capital Area-15Southeast Texas-18South Plains-2South Texas-21Tarrant Co.-5Texoma-25Upper Rio Grande-10West Central Texas-9

TEXAS REGIONAL LOCATION QUOTION | 47

Page 9: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Computers & Peripheral Equipment

Semiconductor &Electronic Components

State Government

Software Publishers

Industrial Machinery

Manufacturing

Commercial Goods Merchant Wholesalers

Land Subdivision

Communications Equipment Manufacturing

Insurance & Employee Benefit Funds

Colleges & Universities

Office Administrative Services

Wireless Telecommunications Carriers

Drinking Places(Alcoholic Beverages)

Architectural and Engineering Services

Electronic Equipment Repair/Maintenance

Computer Systems Design Services

Technical & Trade Schools

Bakeries & Tortilla Manufacturing

Management of Companies & Enterprises

Architectural & Structural Metals Mfg

Other Ambulatory Health Care Services

Miscellaneous Nondurable Goods Wholesalers

Support Activities for Mining

Nursing Care Facilities

General Freight Trucking

Air Passenger & Cargo Carriers

Power Generation & Supply

Plastics Product Manufacturing

Warehousing & Storage

− 2 − 1 0 1 2

$0

$3,000

$2,000

$1,000

Location Quotient (logarithmic)LLoccatio hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

This analysis of wages, concentration of industry workers, and employment level changes shows that the Austin community has key strengths in the areas of:

Meanwhile, the Austin area is relatively weak in and has been losing jobs in the following industries:

Attractive Dominant

Ordinary Significant

MATRIX 2 Austin-Capitol Area WDA LQM

48 | SECTION 5

Page 10: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Location Quotient (logarithmic)LLoccatioo hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

− 1 .5 − 1 .0 − 0 .5 0 .0 0 .5 1 .0 1 .5

$0

$1,000

$2,000

$3,000

$4,000

Data Processing & Related Services

Amusement Parks & Arcades

Investment Funds

Home Health Care Services

Facilities Support Services

Federal Government

Insurance Carriers

Automotive Equipment Rental and Leasing

Bakeries & Tortilla Manufacturing

Heavy Civil Engineering Construction

Support Activities for Air Transport

Banking & Credit Unions

Beverage Manufacturing

Gasoline Stations

Warehousing& Storage

State Government General Freight

Trucking

Advertising & PR

Computer Systems Design

Support Activities for Mining

Electric Goods Merchant Wholesalers

Other Office Support Services

Scheduled Air Transportation

Semiconductor & Electronic Components Mfg

Security & Commodity Investment Activity

Plastics Product Mfg

Machine Shops & Threaded Products Mfg

Power Generation & Supply

This analysis of wages, concentration of industry workers, and employment level changes shows that the San Antonio metro area has key strengths in the areas of:

The San Antonio area is relatively weak in and has been losing jobs in the following industries:

Attractive Dominant

Ordinary Significant

MATRIX 3 San Antonio-Alamo Area WDA LQM

TEXAS REGIONAL LOCATION QUOTION | 49

Page 11: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

−1 0 1 2 3

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Pipeline Transportation

of Crude Oil

Oil and Gas Extraction

Pipeline Transportation of Natural Gas

Ag., Construction, and Mining Machinery

Basic Chemical Manufacturing

Support Activities for Mining

Petroleum & Coal Products Manufacturing

Support Activities for Water Transport

Inland Water Transportation

Other Hospitals

Metal and Mineral Merchant Wholesalers

Other Heavy Construction

Nonscheduled Air Transportation

Utility System Construction

Nonresidential Building Construction

Petroleum Merchant Wholesalers

Automotive Repairand Maintenance

Insurance Carriers

Nursing Care Facilities

Newspaper, Book, & Directory Publishers

Advertising & Related Svc

Federal Government

Software Publishers

Residential Mental Health Facilities

Semiconductor and Electronic Components

Individual & Family Svc

Vocational RehabServices

Medical Equipment & Supplies Mfg

Motion Picture and Video

Location Quotient (logarithmic)oLLoccatio hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

MATRIX 4 Gulf Coast WDA Location Quotient Matrix

This analysis of wages, concentration of industry workers, and employment level changes shows that

Development Area have key strengths in the areas of:

manufacturing

Development Area is relatively weak in and has been losing jobs in the following industries:

Attractive Dominant

Ordinary Significant

50 | SECTION 5

Page 12: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

− 2 − 1 0 1 2

$0

$1,000

$2,000

$3,000

4,000

Scheduled Air Passenger & Cargo Transport

Aerospace Product & Parts Manufacturing

Oil & Gas Extraction

Support Activities for Air Transport

Nondepository Credit Intermediation

Performing Arts & Sports Promoters

Electric Goods Merchant Wholesalers

Pharmaceutical & Medicine Manufacturing

Warehousing & Storage

Office Furniture Manufacturing

Electronic Equipment Repair & Maintenance

Ag., Construction & Mining Machinery

Couriers

Alcoholic Beverage Wholesalers

Lumber & Supply Wholesalers

Freight Transportation Arrangement

Cement & Concrete Product Manufacturing

Data Processing Services

Computer Systems Design Services

Household & Institutional

Furniture Manufacturing

Gasoline Stations

Vocational Rehabilitation Services

Individual & Family Services

Power Generation & Supply

Management of Companies & Enterprises

Insurance Carriers

Medical Equipment & Supplies Manufacturing

State Government

Electronic Instrument Manufacturing

Scientific R&D Services

Residential Mental Health Facilities

Location Quotient (logarithmic)Loccatio hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

This analysis of wages, concentration of industry workers, and employment level changes shows that Fort Worth and the Tarrant County Workforce Development Area have key strengths in the areas of:

The Fort Worth area and its Tarrant County Workforce Development Area has been relatively weak and losing jobs in the following industries:

Attractive Dominant

Ordinary Significant

MATRIX 5 Tarrant County WDA Location Quotient Matrix

TEXAS REGIONAL LOCATION QUOTION | 51

Page 13: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

− 2 − 1 0 1 2

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Dallas WDA Location Quotients 1Q 2011

Federal Bank

Semiconductor & Electronic Components

Communications Equipment Manufacturing

Nondepository Finance & Lending

Oil & Gas Extraction

Clay Product & Refractory Manufacturing

Financial Brokers & Clearinghouses

Nonscheduled Air Transportation

Office Administrative Services

Wired Telecommunications Carriers

Electric Goods Wholesalers

Cleaning Compound & Toiletry Manufacturing

Commercial Goods Wholesalers

Land Subdivision

Pharmaceutical Products Wholesalers

Paint, Coating, & Adhesive Manufacturing

Full−Service Restaurants

Warehousing & StorageVocational Rehab & Worker Training

Social Advocacy Organizations

Professional Organizations

Outpatient Care Centers

Nursing Care Facilities

Scientific R&D Services

Machine Shops & Threaded Products

Animal Slaughtering & Processing

Other General Purpose Machinery Manufacturing

Support Activities for Mining

Individual & Family Social Services

Residential Mental Health Facilities

Motor Vehicle Parts Manufacturing

State Gov't

Location Quotient (logarithmic)oLLoccatioo hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

MATRIX 6 Dallas County WDA Location Quotient Matrix

This analysis of wages, concentration of industry workers, and employment level changes shows that the Dallas Workforce Development Area has key strengths in the areas of: The Dallas Workforce Development Area is both relatively weak

in and has been losing jobs in:

Attractive Dominant

Ordinary Significant

52 | SECTION 5

Page 14: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

Location Quotient (logarithmic)oLLoccatio hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

−3 −2 −1 0 1 2 3

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Coastal Bend WDA (Corpus Christi) Location Quotients 1Q 2011

Support Activities for Mining

Petroleum & Coal Products Manufacturing

Other Heavy Civil Engineering Construction

Home Health Care Services

Oil & Gas Extraction

Machinery & Equipment Leasing Services

Airport Services

Specialty Crop Farming

Pipeline Transportation of Natural Gas

Utility System Construction

Nonresidential Building Construction

Cattle Ranching & Farming

General Rental Centers

Technical & Trade Schools

Petroleum Merchant Wholesalers

Commercial Machinery Repair/Maintenance

Ship Building

Full−Service Restaurants

Auto Dealers

Management & Technical Consulting Services

Warehousing & Storage

Office AdminServices

Couriers

Insurance Carriers

Printing Activities

Security & Commodity Investing

CommercialGoods Merchant Wholesalers

Electronic Markets Investing Agents/Brokers

Management of Companies & Enterprises

Computer Systems Design Services

This analysis of wages, concentration of industry workers, and employment level changes shows that the Corpus Christi metro

key strengths in: Development Area are relatively weak in and has been losing jobs in the following industries:

Attractive Dominant

Ordinary Significant

MATRIX 7 Coastal Bend WDA Location Quotient Matrix

TEXAS REGIONAL LOCATION QUOTION | 53

Page 15: section 5 Texas Regional Location Quotient Matrix AnalysisThe matrix shows the industries with the highest and lowest comparative concentrations, i.e. showing which sectors in Texas

−2 −1 0 1 2 3 4

$200

$400

$600

$800

$1,000

$1,200

Footwear Manufacturing

Business Support Services (including call centers)

Other Crop Farming (including algae)

Home Health Care Services

Cut & Sew Apparel Manufacturing

Shoe Stores

Wireless Telecommunications Carriers

Freight Forwarding & Transportation Arrangement

Vocational RehabServices

Federal Government

General Freight Trucking

Cement & Concrete Product Mfg.

Nonresidential Building Construction

Misc. Durable Goods Wholesalers

Other General Merchandise Stores (incl warehouse clubs)

Junior Colleges

Drinking Places (Alcoholic Beverages)

Office Administrative Services

Specialized Freight Trucking

Radio & TV Broadcasting

Employment Services

Warehousing and Storage

Residential Mental Health Facilities

Insurance Carriers

Electronic Markets and Agents/Brokers

Motion Pictures

Motor Vehicle Parts Manufacturing

Scheduled Air Transportation

Nursing Care Facilities

Management & Technical Consulting Services

Computer Systems Design Services

Professional Organizations

Electronic Instrument Manufacturing

Management of Companies & Enterprises

Location Quotient (logarithmic)LLooccatio hmiccc)

Job Growth Q12006-Q12011Net job growth > 10%

Net job growth 2-10%

Net job growth/loss < 2%

Net job loss 2-10%

Net job loss > 10% 10,000

30,000

220,000

This analysis of wages, concentration of industry workers, and employment level changes shows the Upper Rio Grande Workforce

The Rural Capital Workforce Development Area is relatively weak in and has been losing jobs in:

Ordinary Significant

Attractive Dominant

MATRIX 8 Upper Rio Grande WDA Location Quotient Matrix

54 | SECTION 5