The Manufacturing Sector’s Share of the Southwest Economy has fallen by 25% since 1997
The Southwest economic region is made up of four states, the fewest number in any of the eight regions. Texas is one of these and its also the second largest in the country. As Texas accounts for 74% of the Southwest regional economy, detailed analysis on a regional basis will mask significant changes in the other states.
As an example, the finance, insurance and property sector is the largest in the Southwest Region, but only in Arizona, one of the fourth states. The manufacturing sector is the largest in Texas, and the government sector is the largest in New Mexico and Oklahoma. What this does mean is that on a regional basis, finance, as the largest sector, only accounts for 15.3% of gross domestic product, and is only 3.6% points higher than the 4th largest sector, whereas nationally finance etc accounts for 20.4% of the economy and is 8.3% points higher than the fourth largest sector.
Whilst it is true to say the finance etc sector is the largest in every region, it is also true to say that the Southwest regional economy relies on it the least. In contrast, 25.9% of the Mideast economy comes from the finance, insurance and property sector.
The trade sector is the second largest in the Southwest region, the highest position in all of the regions, and fifth nationally. However, at 13.6% of gross domestic product, it is higher than the national average of 12% but not significantly so. It holds second, third, fourth and fifth position in the respective state economies in the region.
The biggest decline has come in the manufacturing sector, down to 12.9% in 2015 from 17% in 1997, when it was the largest economic sector in the region. It is in this sector that the regional data distorts the true performance of this sector in each state in the region. Nationally the manufacturing sector’s share of the economy fell by 24% but in Texas, which is the largest economy in the region and whose largest sector is manufacturing, the sector only fell from 17% to 14.9% of the economy, equivalent to 15%.
Contrast that to the decline in the other three regional states. Oklahoma’s manufacturing sector share of the economy fell 35% to 10% from 15.6%. Arizona’s has fallen to 8.1% from 16.3%, a drop of 50%. But New Mexico’s has fallen 79% to 4.5% to 21.2%, is a complete collapse of the sector as a contributor to GDP, larger than any other state in the country.
So two of the manufacturing sector’s largest declines in share of a state economy have come in this region, with New Hampshire’s decline of 50.2% from 22.6% to 10.7% wedged between Arizona and New Mexico’s experience.
The two service sectors of professional and business service, and the educational , health care and social assistance sector, have both increased their share of gross domestic product to 10.9% and 6.8% respectively, but both remain below the national average of 12.3% and 8.4% respectively.
The mining sector is a relatively important sector in the region, making up 8.5% of the regional economy in 2015, up from 5% in 1997. The national average is 1.8%. Mining is of little consequence to Arizona’s economy but it makes up 12.4% of Oklahoma’s, 10% in New Mexico and 9.2% in Texas, and has experienced substantial  growth in all three.
The construction industry sector makes up 5% of GDP in 2015 which is above the national average of 4.1%, and it is growing faster. The arts, entertainment and accomodation sector, at 3.7% is below the national average of 4%.
![USA's GDP by Industry Percentage Share 1997 & 2015](https://i0.wp.com/economyofstates.com/wp-content/uploads/2017/07/USA1.png?resize=696%2C496&ssl=1)
![USA Gross Domestic Product ($m) by Region in 2015](https://i0.wp.com/economyofstates.com/wp-content/uploads/2017/07/USA-REGION-ECONOMIES-2015-GDP-M.png?resize=696%2C660&ssl=1)
State | Ind ID | Description | 2015 | 2007 | 1997 | +/- 15v97 |
---|---|---|---|---|---|---|
Oklahoma | 88 | Transportation and utilities | 7.4% | 5.35% | 6.1% | 1.3% |
Texas | 88 | Transportation and utilities | 5.8% | 5.29% | 6.1% | -0.3% |
Southwest | 88 | Transportation and utilities | 5.8% | 5.13% | 5.9% | -0.1% |
Arizona | 88 | Transportation and utilities | 4.9% | 4.65% | 5.2% | -0.2% |
New Mexico | 88 | Transportation and utilities | 4.3% | 3.95% | 3.9% | 0.4% |
Texas | 87 | Trade | 14.0% | 12.75% | 14.1% | -0.1% |
Arizona | 87 | Trade | 13.6% | 13.72% | 13.7% | -0.1% |
Southwest | 87 | Trade | 13.6% | 12.61% | 13.7% | -0.2% |
Oklahoma | 87 | Trade | 11.6% | 11.10% | 13.1% | -1.5% |
New Mexico | 87 | Trade | 9.5% | 9.67% | 10.3% | -0.8% |
Arizona | 59 | Professional and business services | 11.7% | 10.96% | 8.8% | 2.9% |
Texas | 59 | Professional and business services | 11.1% | 9.99% | 8.7% | 2.4% |
Southwest | 59 | Professional and business services | 10.9% | 9.98% | 8.6% | 2.3% |
New Mexico | 59 | Professional and business services | 10.2% | 10.35% | 7.4% | 2.8% |
Oklahoma | 59 | Professional and business services | 8.6% | 7.88% | 7.9% | 0.7% |
New Mexico | 81 | Other services, except government | 2.3% | 2.30% | 2.6% | -0.3% |
Arizona | 81 | Other services, except government | 2.2% | 2.06% | 2.5% | -0.3% |
Oklahoma | 81 | Other services, except government | 2.1% | 2.19% | 3.0% | -0.9% |
Southwest | 81 | Other services, except government | 2.1% | 2.09% | 2.7% | -0.6% |
Texas | 81 | Other services, except government | 2.0% | 2.07% | 2.7% | -0.7% |
Oklahoma | 6 | Mining | 12.4% | 14.81% | 4.6% | 7.9% |
New Mexico | 6 | Mining | 10.0% | 10.72% | 5.0% | 4.9% |
Texas | 6 | Mining | 9.2% | 11.62% | 5.9% | 3.4% |
Southwest | 6 | Mining | 8.5% | 10.33% | 5.0% | 3.5% |
Arizona | 6 | Mining | 1.7% | 1.90% | 1.2% | 0.5% |
New Mexico | 12 | Manufacturing | 4.5% | 6.66% | 21.2% | -16.6% |
Arizona | 12 | Manufacturing | 8.1% | 9.28% | 16.3% | -8.3% |
Oklahoma | 12 | Manufacturing | 10.0% | 11.06% | 15.6% | -5.6% |
Southwest | 12 | Manufacturing | 12.9% | 13.68% | 17.0% | -4.1% |
Texas | 12 | Manufacturing | 14.5% | 15.47% | 17.0% | -2.4% |
Texas | 45 | Information | 3.3% | 4.10% | 4.7% | -1.5% |
New Mexico | 45 | Information | 3.1% | 2.89% | 2.4% | 0.8% |
Southwest | 45 | Information | 3.1% | 3.76% | 4.2% | -1.1% |
Arizona | 45 | Information | 3.0% | 2.90% | 3.1% | -0.1% |
Oklahoma | 45 | Information | 2.2% | 3.05% | 3.7% | -1.4% |
New Mexico | 82 | Government | 22.9% | 22.96% | 22.4% | 0.5% |
Oklahoma | 82 | Government | 15.5% | 15.78% | 16.2% | -0.7% |
Arizona | 82 | Government | 13.6% | 12.88% | 13.5% | 0.1% |
Southwest | 82 | Government | 11.7% | 11.98% | 12.9% | -1.2% |
Texas | 82 | Government | 10.3% | 10.56% | 11.5% | -1.3% |
New Mexico | 50 | Finance, insurance, real estate, rental, and leasing | 16.4% | 13.51% | 11.8% | 4.7% |
Arizona | 50 | Finance, insurance, real estate, rental, and leasing | 22.4% | 20.74% | 19.2% | 3.2% |
Southwest | 50 | Finance, insurance, real estate, rental, and leasing | 15.3% | 14.55% | 15.4% | -0.1% |
Oklahoma | 50 | Finance, insurance, real estate, rental, and leasing | 13.4% | 13.88% | 14.1% | -0.6% |
Texas | 50 | Finance, insurance, real estate, rental, and leasing | 14.2% | 13.33% | 15.1% | -0.8% |
New Mexico | 68 | Educational services, health care, and social assistance | 7.8% | 6.42% | 4.9% | 2.9% |
Arizona | 68 | Educational services, health care, and social assistance | 9.5% | 7.26% | 6.0% | 3.5% |
Southwest | 68 | Educational services, health care, and social assistance | 6.8% | 5.94% | 5.8% | 1.0% |
Oklahoma | 68 | Educational services, health care, and social assistance | 7.4% | 6.70% | 6.8% | 0.6% |
Texas | 68 | Educational services, health care, and social assistance | 6.1% | 5.52% | 5.7% | 0.5% |
Texas | 11 | Construction | 5.3% | 5.48% | 4.2% | 1.1% |
Southwest | 11 | Construction | 5.0% | 5.79% | 4.3% | 0.7% |
Oklahoma | 11 | Construction | 4.3% | 3.73% | 3.8% | 0.6% |
Arizona | 11 | Construction | 4.1% | 8.44% | 5.1% | -1.1% |
New Mexico | 11 | Construction | 3.6% | 5.46% | 3.5% | 0.1% |
Arizona | 74 | Arts, entertainment, recreation, accommodation, and food services | 4.5% | 4.42% | 4.2% | 0.3% |
New Mexico | 74 | Arts, entertainment, recreation, accommodation, and food services | 4.0% | 3.54% | 3.0% | 1.0% |
Southwest | 74 | Arts, entertainment, recreation, accommodation, and food services | 3.7% | 3.36% | 3.4% | 0.3% |
Texas | 74 | Arts, entertainment, recreation, accommodation, and food services | 3.5% | 3.13% | 3.3% | 0.3% |
Oklahoma | 74 | Arts, entertainment, recreation, accommodation, and food services | 3.4% | 3.21% | 3.3% | 0.2% |
Oklahoma | 3 | Agriculture, forestry, fishing, and hunting | 1.5% | 1.26% | 1.9% | -0.4% |
New Mexico | 3 | Agriculture, forestry, fishing, and hunting | 1.4% | 1.57% | 1.7% | -0.3% |
Arizona | 3 | Agriculture, forestry, fishing, and hunting | 0.7% | 0.79% | 1.1% | -0.4% |
Southwest | 3 | Agriculture, forestry, fishing, and hunting | 0.7% | 0.80% | 1.2% | -0.5% |
Texas | 3 | Agriculture, forestry, fishing, and hunting | 0.6% | 0.70% | 1.0% | -0.5% |
The manufacturing sector share of Arizona’s economy has halved to only 8.1% in 2015
![ARIZONA's GDP by Industry Percentage Share 1997 & 2015](https://i0.wp.com/economyofstates.com/wp-content/uploads/2017/07/ARIZONA1.png?resize=696%2C497&ssl=1)
The most notable feature of the composition of Arizona’s economy and how it has changed since 1997 is the the decline of the manufacturing sector. It was the second largest sector at 16.3% of gross domestic product in 1997 but it has fallen 50% to 8.1% of the economy in 2017, well below the national average of 12.1%, and now only the 6th largest in the state.
As a share of  a states economy, only in New Hampshire, District of Columbia and New Mexico has the decline in manufacturing been so pronounced.
The finance, insurance and property sector is still the largest and its share has increased to 22.4%, a full 8.8% points larger than the second largest which is trade. The gap was 2.9% in 1997.
The trade and government sectors have held their own at 13.6% of GDP, the the professional and business services sector and the educational, health care and social assistance sectors have both grown faster to 11.7% and 9.5% of GDP respectively, the former still below the national average of 12.3% but the latter ahead of the 8.4% national share.
The construction sector has declined to 4.1% of Arizona’s GDP in 2015 from 5.1% in 1997.
The mining sector now accounts for 1/8th of Oklahoma’s economy but manufacturing is in steep decline
![OKLAHOMA's GDP by Industry Percentage Share 1997 & 2015](https://i0.wp.com/economyofstates.com/wp-content/uploads/2017/07/OKLAHOMA1.png?resize=696%2C498&ssl=1)
The Oklahoma mining industry’s share of gross domestic product has increased to 12.4% of the total in 2015, compared to just 4.6% in 1997, a rate that is now higher than in Texas and New Mexico. Only in Wyoming, Alaska, North Dakota and West Viriginia does mining make a greater contribution to the state economy, and similarly large changes happend in the latter two states (North Dakota’s mining industry rose to 13.5% from 2.2% of GDP, and West Virginia’s increased to 13.4% from 7.4%).
As a result of this rapid increase in the mining sector, the share of the economy contributed by the 4 main sectors, namely the government sector, the finance, insurance and property sector, the trade sector and the manufacturing sector, all fell as a percentage of GDP.
Government remains the largest sector at 15.5% down from 16.2%, one of only 5 states (Alaska, Mississippi, New Mexico, West Virginia) as well as the District of Columbia where this is so.
The finance, insurance and property sector’s share GDP also fell to 13.4% from 14.1%, and again Oklahoma is one of only 5 states where this sector has actually declined as a share of GDP since 1997, the others being Texas, Oregon, Louisiana and Indiana.
On the flip side, the mid table sectors all increased their share of GDP, despite the rapid change in the mining sector. The professional and business service sector rose to 8.6% from 7.9% but is well below the national average of 12.3%. The educational services, health care and social assistance sector has increased to 7.4% but is also below the national average of 8.4% in 2015.
The transportation and utilities sector has increased to 7.4% from 6.1% and is well ahead of the national average of 4.6%.
The construction sector has increased to 4.3% from 3.8% and is just ahead of the national average of 4.1%
The arts, entertainment, recreation, accomodation and food services sector has increased to 3.4% but is below the national average of 4%.
The information sector has declined to 2.2% of GDP from 3.7% and is now well below the national average of 4.7% and moving in the opposite direction.
The manufacturing sector’s share New Mexico’s gross domestic product has fallen 79% since 1997, more than in any other state
![NEW MEXICO's GDP by Industry Percentage Share 1997 & 2015](https://i0.wp.com/economyofstates.com/wp-content/uploads/2017/07/NEW-MEXICO1.png?resize=696%2C497&ssl=1)
The changes in composition of the New Mexico’s economy has been the most dramatic in more than one industry between the period 1997 and 2015. The three most dramatic changes have been in the manufacturing sector, the finance insurance and property sector, and the mining sector. While these changes have happened, the government sectors share of the economy has remained the largest, and has only increased to 22.9% from 22.4% in that time.
The collapse of the manufacturing sector’s share of GDP is the largest decline in share for any state. It accounted for 21.2% of the economy in 1997 and now accounts for only 4.5%, and no other sector of this size has fallen as much in any state since 1997.
The finance, insurance and property sector is now the second largest at 16.4% of GDP, up from 11.8%, a 39% increase in share, the highest rate of increase for this sector anywhere in the country.
The professional and business service sector is now the third largest, up 5th, but at 10.2% its contribution is below the national average of 12.3%.
The mining sector has increased to 10% of GDP, double what it was in 1997 and it is now the 4th largest sector in New Mexico. Mining’s share of the economy is now the 5th largest nationally behind Wyoming, Alaska, North Dakota, West Viriginia and Oklahoma.
The educational services, health care and social assistance sector has increased its share of GDP by 59% to 7.8% from 4.9% in 1997, the second largest rate of increase behind Alaska and ahead of Arizona.
New Mexico’s information sector increased its share of GDP to 3.1% from2.4%, the only state in the region to have registered an increase in share. it remains below the national average of 4.7%.
Manufacturing remains the largest sector of the Texas economy in 2015 but only just
![TEXAS' GDP by Industry Percentage Share 1997 & 2015](https://i0.wp.com/economyofstates.com/wp-content/uploads/2017/07/TEXAS1.png?resize=696%2C495&ssl=1)
The Texas economy is the second largest in the country and at $1.7tn, rapid changes in its composition would have consequences both nationally and in the region.
The manufacturing sector remains the largest in Texas, but it has fallen to 14.5% of GDP from 17%.
The second largest sector, finance, insurance and property has also declined as a share of gross domestic product to 14.2% from 15.1%, a decline of 5.1%, the largest decline in any state and only 1 of 5 to register a decline at all (Oklahoma, Indiana, Louisiana and Oregon being the others). Finance, insurance and property is the largest sector in the country at 20.4% so the Texas economy appears more balanced, with only .5% points separating the top three sectors of the economy, and the government sector only the fifth largest.
Trade is the third largest sector and has retained its share at 14.1%, up on the national average of 12%.
The professional and business service sector has overtaken the government sector and is now 4th largest, but at 11.1% it remains below the national average.
The mining sector’s contribution to GDP has grown by 56% to 9.2% in 2015, and it is now the 7th largest share behind Wyoming(22.2%), Alaska (19.5%), North Dakota(13.5%), West Virginia(13.4%), Oklahoma (12.4%) and New Mexico (10%). But to put some perspective on it the mining sector in Texas is three times bigger than the mining sector in those states combined.
The educational services, health care and social assistance sector has increased modestly to 6.1% and remains below the national average of 8.4%.
The construction sector has increased in size to 5.3% of GDP from 4.2% in 1997, and is growing faster than it is nationally, but the information sector is moving in the opposite direction, falling to 3.3% from 4.7% in 1997, and is falling compared to the national average of 4.7%.