Articles
Fewer manufacturing employees in Houston are working in oil and gas. What industries will drive growth?
More than a quarter – 26% – of all Texans who work in manufacturing do so in Greater Houston – nearly 240,000 employees. It’s one of America’s most influential production ecosystems.
Houston’s petro-refining chops have long defined its manufacturing brand – reflected in thousands of fabricated metal and machining establishments and a nation-leading chemical manufacturing sector. Here’s Greater Houston's top manufacturing sectors by company type, and number of employees:
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Fabricated Metal Products, 53,117 employees
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Chemicals, 42,230
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Machinery, 39,954
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Food Processing, 18,253
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Computers and Electronics 412 13,865
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Plastics and Rubber, 11,323
But it's also a sector in transition, per the Greater Houston Partnership 2025 Economic Outlook released last December.
The report notes that “The sector has 17,500 fewer jobs tied to manufacturing oil field equipment and 13,500 tied to fabricated metal products (pipes, valves, and flanges) than it did 10 years ago,” also concluding that “With the rig count operating well below where it was a decade ago, those jobs are unlikely to ever come back.”
Yet the report also forecasts that manufacturing will grow by 3,500 jobs in 2025 and notes that manufacturing “is (Houston's) single largest contributor to GDP, accounting for $1 in every $7 of Houston’s economic output.”
What industries are driving growth?
The biggest customer of Houston’s industrial base will continue to be oil and gas. But if “energy employment in Houston today is 25 percent smaller than it was a decade ago,” as GHP notes, Houston’s nation-leading ecosystem of machiners, equipment makers, chemical plants and plastics manufacturers are sure to find opportunity in tomorrow’s growth industries.
They include consumer electronics with nameplates like Apple, Nvidia, and global contract manufacturers Foxconn adding to an already deep local bench of OEMs and suppliers. Food and beverage is always America’s underappreciated manufacturing employment engine and a sector starved for innovation. South Texas’ burgeoning semiconductor ecosystem, automotive and aerospace supply-chains, will all require capable and growing industrial assets – as will the thousands of consumer brands that require equivalent talent and acumen to reshore work.
Manufacturing in the US looks different state to state, city to city – in the notoriety of its brands but more, in the capabilities of its contract manufacturers and suppliers.
Houston’s already known as an oil and gas town. It’s time to shine a light on the manufacturers that got it there, as assets in America’s new manufacturing economy.
Bart Taylor is executive director of the GHMA and founder of InsideMFG. Reach him at [email protected]
Houston’s reshoring opportunity: What the data says
It was apparent several years ago that American companies manufacturing offshore would face hard choices relating to operations in China and other outposts. It's therefore no surprise that Reshoring Initiative’s (RI) recent surveys demonstrate steady plans to bring more manufacturing jobs onshore, and more, that government incentives put in place by the Biden administration accelerated the plans of many U.S. OEMs.
Trump II tariffs were widely speculated to add more fuel to the “reshoring” fire – but RI’s most recent 2025 survey of OEMs and Contract Manufacturers indicate that tariffs have cut both ways: manufacturers are less sure about budgets and forecasts, and as a result, some OEMs are deciding to wait for more operational predictability, let alone search for new domestic suppliers.
That said, there will be no slowing down of the desire to cite more manufacturing work in the U.S., and for cities like Houston that boast a deep and capable industrial base, opportunity beckons.
For starters, RI asked OEMs “On what basis are you comparing offshore vs. domestic options?” Landed-cost is the most-sited metric – by 37% of respondents.
Yet RI also found that ‘‘43% of OEMs value fast delivery and would be willing to pay 10% to 20% more for components if they could be delivered within a 1-week lead time versus a 6-week lead time." Meaning speed-to-market may be a U.S.-based contract manufacturer’s most valuable asset in landing new, reshored work.
I’ve summarized the two major Reshoring Initiative studies, and what they mean to Houston manufacturers, here:
The lesson for Houston manufacturing is clear: local and national OEMs are on the lookout for qualified, domestic business partners. It's our mission to shine a light on Houston companies as options, wherever we can.
Bart Taylor is executive director of the Greater Houston Manufacturing Association and publisher of GHMA Update. Contact him at [email protected].
