Manufacturing Industry Triples Impact on San Antonio Economy

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A Precision Mold & Tool Group Tool Maker Ernesto Gonzalez operates the Electrical Discharge Machine (EDM).

Bonnie Arbittier / Rivard Report

Ernesto Gonzalez operates an electrical discharge machine at Precision Mold & Tool Group.

Manufacturing has turned the wheels of San Antonio’s economy since its earliest days, and yet a new study released this week by the San Antonio Manufacturing Association (SAMA) shows just how much the industry has powered the city’s economic engine in the last 16 years.

Since 2001, the total measurable economic impact of San Antonio-area manufacturing has more than tripled, from $12.9 billion to $40.5 billion last year, according to research conducted by Trinity University for the manufacturing trade association and the San Antonio Economic Development Foundation.

Transportation, equipment, and fabricated metals production have increased in the San Antonio area in recent years, pushing manufacturing’s local economic impact from $31.6 billion in 2011 – the last time the data was compiled – to $40.5 billion in 2016, a 28 percent jump.

“More than 1,500 manufacturing companies in the greater San Antonio area are producing everything from trucks to medical devices to coffee, and they’re exporting an estimated $9.4 billion in goods to the rest of the U.S. and the world,” stated SAMA chairman F.M. “Duffy” Shea in a press release. “Manufacturing makes a huge contribution to our local economy and our standard of living.”

By contrast, the military contributed $48.7 billion annually to the Texas economy  in 2015. San Antonio’s biosciences and health care industry has a $23.9 billion regional economic impact (2014 figure), and tourism, San Antonio’s third-largest industry, has an annual $14 billion economic impact.

Manufacturing workers in San Antonio earned a total of nearly $3 billion in wages last year, 36 percent more than a decade ago, the report said. Local manufacturing jobs on average pay 23 percent more than non-manufacturing jobs in the area – $57,507 versus $46,891. In 2001, that pay gap was 13 percent.

Trinity professors Richard Butler and Mary Stefl led the research team that created the report. They found that while the total manufacturing workforce has dropped from 57,719 in 2001 to 51,904 last year, they believe the headcount of would rise by thousands if contract workers were included. Average wage figures would also likely jump significantly if part-time workers were excluded from the calculations.

Transportation manufacturing jobs, such as those at Toyota Motor Manufacturing Texas and its suppliers, pay the highest wages in San Antonio, averaging more than $68,000 a year.

Workers in the materials and electricity sector and equipment and metal products sector average about $60,000 a year. Diversified products manufacturing, dominated by the food and beverage sector, pays less but still close to the overall average San Antonio annual salary of just under $47,000.

In terms of economic impact, the SAMA study showed that segments of San Antonio’s manufacturing industry are fairly balanced in their product outputs.

Transportation leads the pack with 32.4 percent of the total output. It is the sector with the biggest gains since 2001, due in part to the Toyota plant opening here in 2006 and giving San Antonio its own place on the map of Texas auto manufacturing.

Home to 1,752 automaker facilities, Texas has experienced a 17 percent increase in automotive manufacturing since 2014, according to the Governor’s Office of Economic Development and Tourism. As the primary link between Mexico’s auto plants and the rest of the U.S. auto industry, the state has a lot to gain, or lose, in ongoing negotiations to revise the North American Free Trade Agreement (NAFTA).

Other manufacturing sectors contributing to the economic impact in San Antonio include equipment and metal products (24.6 percent), which jumped from $4.2 billion to $7.1 billion, diversified products (21.9 percent), and materials & electricity (21.1 percent).

San Antonio EDF President and CEO Jenna Saucedo-Herrera.

“The [study] validates that our collective efforts to drive growth in this sector are moving the needle,” stated Jenna Saucedo-Herrera, SAEDF president and CEO, in an email. “SAEDF is committed to continued partnership with SAMA to further develop and evolve the regional manufacturing industry. Since the last impact study in 2011, SAEDF has assisted over 40 manufacturing companies relocate to or grow their operations in San Antonio, roughly 35 percent of SAEDF’s projects.”

Researchers noted a continuing shift of manufacturing jobs away from low-skill work and toward high-skill, high-tech careers.

SAMA and a range of local education and workforce agencies continue to work to sustain and expand the local manufacturing industry through several programs, including the Advanced Technology and Manufacturing Academy; the Alamo Colleges District; the cities of San Antonio, New Braunfels, and Seguin; and numerous area school districts.

While the study did not evaluate manufacturing’s impact on the local environment, SAMA President and CEO Rey Chavez said the city’s industries work to minimize their environmental impact.

“The environment was not included simply because this was an economic impact report,” Chavez said. “Manufacturing in our area is very clean. In fact, many awards have been given to our manufacturers, especially in regard to water and also air, and specifically for CPS Energy for all its work and investments.”

Chavez also lauded the San Antonio Water System for working with local businesses on water conservation.

“I want to highlight that manufacturers are very conscientious and want to be good stewards as well,” Chavez said. “So they absolutely work to ensure we maintain and take care of both the air and water environment.”

In October, Mayor Ron Nirenberg addressed the issue of pollution at the San Antonio Air Quality Summit, saying the City, local mass transit and utility agencies, and businesses should do their part to help reduce emissions of ozone-forming pollutants. Nirenberg said cleaner air and reducing people’s carbon footprint is not just a public health or environmental issue, but an opportunity for businesses to discover and develop eco-friendly best practices.

At the time, the City had not yet released a study that has since shown Bexar County’s ozone levels exceed the Environmental Protection Agency’s (EPA) most recent standard. It was the first local analysis by the Office of Sustainability that directly addressed how ground-level ozone pollution impacts San Antonio’s public health and economy.

Despite missing the EPA designation, the San Antonio metropolitan area’s ozone levels have decreased in recent years, and in 2015, the EPA recognized Toyota with an Energy Star Award.

Yet one possible measure that could improve air quality is an inventory by the Texas Commission on Environmental Quality of area emitters – mainly large manufacturers – and their periodic reporting of their emissions.

“The Office of Sustainability, in conjunction with AACOG [Alamo Area Council of Governments] and other partners, actively works with businesses and industries of all sizes in SA to recommend and implement environmentally conscious practices that have positive air quality benefits,” he said.

 

7 thoughts on “Manufacturing Industry Triples Impact on San Antonio Economy

  1. For years regional manufacturers have been environmentally focused and doing their part to minimize their carbon footprint. SAMA and SAWS have also worked for years in ensuring water conservation as well and jointly developed the testing procedures for waster waste which is still in place today. Manufacturers will continue to work with our region’s communities, counties, AACOG and TCEQ to ensure we take care of our environment. We also encourage partnerships and communications to share best practices in environmental policies.

    • Thank you for pointing that out, David. I have added those figures in the second paragraph, and we have provided a link to the report.

  2. I believe you are missing a few zeros in the numbers shown in the 2nd paragraph. The economic impact numbers are “Billions”, not “Millions”, of dollars annually ($12.9 Billion of regional economic impact in 2001 and $40.5 Billion in 2016). A significant correction.

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