Skip to content

At the Heart of Texas: Cities’ Industry Clusters Drive Growth

Fort Worth–Arlington: Transportation-Related Sectors Predominate in Local Economy

At a Glance

Fort Worth–Arlington

Population (2014): 2.3 million*
Population growth (2006–14): 18.6 percent
Median household income (2014): $58,132
National MSA rank (2014): No. 4*
Kauffman Startup Activity Index rank (2015): No. 15* (Dallas and Fort Worth combined)
*The Fort Worth–Arlington metropolitan division is part of the Dallas–Fort Worth metropolitan statistical area (MSA) and encompasses Hood, Johnson, Parker, Somervell, Tarrant and Wise counties. The population of the Dallas–Fort Worth MSA is 6.95 million. The Kauffman Startup Activity Index, a measure of business creation in the 40 largest U.S. metropolitan areas, is further explained in the Appendix.

  • Fort Worth began as an outpost marking Texas’ western frontier. Rail connections and a central location for cattle drives helped establish the city’s identity as “Cowtown,” a moniker that endures.
  • In the years surrounding World War II, Fort Worth emerged as a hub for the aviation and defense industries, key elements of the local economy today.
  • Fort Worth’s relatively less-well-educated populace provides a ready workforce for the manufacturing sector but may be a factor shifting some types of employment toward its regional neighbor, Dallas.
  • Depressed energy prices limit exploration of the area’s natural gas reserves but provide support to Fort Worth’s strong transportation sector.

HISTORY: Cowtown Takes Off with Aviation

Fort Worth, established as an Army fort near the Clear Fork of the Trinity River in 1849, is named after Mexican War hero U.S. Army Gen. William Jenkins Worth. He had proposed a series of 10 forts from Eagle Pass to North Texas to mark the western Texas frontier. Shortly after Fort Worth’s inception, settlers began moving in and, by 1860, had established the city as a county seat. However, its initial growth spurt didn’t occur until after the Civil War.

Once a wayside for cowboys on cattle drives to Kansas, Fort Worth attracted the interest of cattle buyers and meatpackers and acquired the nickname “Cowtown.” The Texas Pacific Railway completed a route linking Fort Worth with San Diego in 1876—the first in a series of railroad ties—and the city caught the attention of Armour and Co. and Swift and Co. Local citizens assembled a $100,000 incentive to entice the companies. Both began slaughterhouse operations in 1903, helping draw a burgeoning livestock trade to North Fort Worth.

Following the discovery of big oil in Texas in 1901, refinery and pipeline firms came to Fort Worth, leading to the establishment of oil stock exchanges. Oil and gas companies increased their foothold during the oil boom of the 1980s and the more recent discovery of large natural gas deposits in the nearby Barnett Shale.

With World War II, the aviation industry established a major presence in the form of Consolidated Aircraft Corp. (later acquired by General Dynamics Corp. and now part of Lockheed Martin Aeronautics Co.). Carswell Air Force Base (now the Naval Air Station Joint Reserve Base), part of the Strategic Air Command, was located next door. The siting of Dallas/Fort Worth International Airport (DFW) in 1973 on the Tarrant–Dallas county line and subsequent relocation of American Airlines nearby have continued to link the city to the aviation industry.[1]

INDUSTRY CLUSTERS: Transportation Manufacturing, Defense Vital

Location quotients (LQs), which compare the relative concentration of various industry clusters locally and nationally, are a convenient way of assessing key drivers in an economy. An LQ exceeding 1 indicates that a specific industry cluster carries more relative weight locally than nationally. Industry cluster growth is measured by the percentage-point change in its share of local employment between 2006 and 2014 (Chart 4.1).[2]

Transportation Clusters Drive Fort Worth's Economy

Clusters in the top half of Chart 4.1, such as transportation equipment manufacturing, defense and security, and mining and energy, have a larger share of employment relative to the nation and, thus, an LQ greater than 1. These clusters are generally vital to the area’s economy and can be expanding rapidly (“star”) or growing slowly (“mature”). Those in the bottom half, such as information technology and telecommunications, are less-dominant locally than nationally and, hence, have an LQ less than 1. “Emerging” clusters, such as business and financial services and health services, are fast growing; those growing slowly are “transitioning.”

The relatively large LQs of transportation equipment manufacturing, transportation and logistics, and defense and security reflect their outsized role in the region. Along with DFW Airport, Fort Worth Alliance Airport and the Joint Reserve Base are major hubs of activity. Additionally, General Motors Co. has operated an assembly plant in Arlington since 1954 and continues to invest in its growth, recently unveiling a $1.4 billion upgrade and expansion. The plant specializes in larger sport utility vehicles.

Government, which saw employment growth of 7 percent during the 2006–14 study period, is the largest cluster (Chart 4.2). The Fort Worth metropolitan division is a regional federal employment center supporting a defense and security cluster that also includes Lockheed Martin Corp. and Bell Helicopter. Jobs in recreation and food services, the second-largest cluster, expanded 25 percent during the period. This includes growth at Arlington’s Six Flags Over Texas amusement park, whose parent company, Six Flags Entertainment Corp., is based in nearby Grand Prairie. Arlington is the site of two premier sports facilities—AT&T Stadium, where the Dallas Cowboys football team has played since it moved from Irving in 2009, and Globe Life Park (formerly the Ballpark in Arlington), home field of the Texas Rangers baseball team.

Energy Sector Employment Growth Leads Fort Worth Gains

Mining and energy was the cluster with the fastest employment growth, up 37 percent in 2006–14. Fort Worth was a center for oil exchanges early in the last century and enjoyed easy access to the Permian Basin to the west. Today, it is the center of the Barnett Shale formation, a prolific source of natural gas. Persistent price weakness—natural gas was selling for roughly 15 percent of its July 2008 high in the first week of November 2015—has prompted some retrenchment.

On average, clusters with a greater employment concentration than the national economy paid about $50,900 annually, less than those with a relatively smaller presence at $60,000 (Table 4.1). However, certain locally concentrated clusters such as biomedical boasted the region’s best-paying jobs at more than $121,400 per year. Transportation equipment manufacturing—with three times the national employment share (LQ of 3)—also pays well at $91,100, as does defense and security (LQ of 2.3) at $85,400. By comparison, recreation and food services (straddling the star and emerging categories) and the large retail cluster (sitting between the mature and transitioning categories) were among the lowest paying at about $20,500 and $30,600 a year, respectively.

Table 4.1: Transportation and Defense Sectors Pace Earnings
Cluster Fort Worth   U.S.
  2006 2008 2010 2012 2014   2014
Transportation equipment manufacturing 91,891 86,307 90,998 92,760 91,066 71,570
Defense and security 87,189 82,426 84,467 84,506 85,350 59,588
Transportation and logistics 59,676 48,906 48,954 56,451 48,164 51,043
Mining and energy 72,359 72,649 80,370 73,236 76,008 76,815
Machinery manufacturing 61,635 68,351 63,782 67,174 65,604 66,715
Fabricated metal manufacturing 47,487 48,896 50,730 51,500 53,572 53,130
Construction 51,110 50,735 48,734 49,983 52,717 55,041
Glass and ceramics 51,387 50,721 50,156 53,140 58,214 51,073
Chemicals 79,827 75,367 95,256 89,891 84,615 69,856
Biomedical 134,348 117,066 145,951 133,680 121,426 91,463
Recreation and food services 22,471 20,571 20,667 21,221 20,505 23,870
Retail 32,350 31,217 30,907 30,324 30,598 28,743
Wood products 46,257 44,639 45,906 46,639 47,825 48,793
Clusters with location quotient >1 52,716 49,921 51,491 51,578 50,889
Clusters with location quotient <1 58,196 58,050 59,307 59,146 59,955
Average earnings (total) 49,718 48,617 49,544 49,103 50,170 51,361
NOTES: Clusters are listed in order of location quotient (LQ); clusters shown are those with LQs greater than 1. Earnings data are in 2014 dollars.
SOURCES: Texas Workforce Commission; Bureau of Labor Statistics; authors’ calculations.

DEMOGRAPHICS: In-Migration Plays Key Growth Role

Fort Worth and its larger neighbor, Dallas, make up the Dallas–Fort Worth metroplex—the fourth-largest MSA in the country, with 6.95 million people.[3] New residents from elsewhere in the U.S. accounted for 38 percent of the metroplex’s population growth in 2014, and the region took one of the two top spots nationally for total net migration from 2011 to 2014.

About 61.5 percent of the Fort Worth area’s foreign-born population came from Latin America, less than the almost 70 percent share for Texas.

Fort Worth’s per capita income of $28,629, while about 8 percent lower than Dallas’, was close to the U.S. figure of $28,889. However, Fort Worth’s median household income—the midpoint at which half of incomes are above and below—was $58,132, exceeding the U.S. median of $53,657 and trailing Dallas.

Consistent with the area’s manufacturing emphasis, 28.4 percent of workers age 25 or older hold a bachelor’s or higher degree, less than Dallas at 34.5 and the U.S. at 30.1 but nearly on par with Texas at 27.8 percent (Chart 4.3). The share of adults with only a high school diploma in Fort Worth exceeds the share in Dallas.

Share of College Graduates Lower in Fort Worth Relative to Dallas

EMPLOYMENT: Energy Affects Postrecession Recovery

While Fort Worth and Dallas together make up a diversified economy that closely resembles the U.S. as a whole, the influence of the mining and energy cluster—whose LQ of 1.3 makes it more prominent locally than nationally—likely helped Fort Worth get a quicker start than its sister metro following the Great Recession. While it took Dallas 51 months to regain all the jobs it lost during the recession, Fort Worth was able to rebound in 42 months.

The situation was reversed in 2015, with the steep decline of oil and gas prices restraining the Fort Worth area’s expansion.

Through much of 2012 and 2013, the Fort Worth area’s unemployment rate was 0.2 percentage points lower than Dallas’. A similar spread, this time favoring Dallas, emerged during 2015 as the energy slump deepened. Employment growth in Fort Worth was uneven in 2015 as well, and through the first 11 months, job gains clocked in at a mere 0.2 percent annual rate. This compares with 4.1 percent for Dallas. Despite the slowdown, Fort Worth unemployment averaged around 4 percent through 2015, compared with 5.3 percent for the U.S.[4]

OUTLOOK: Transportation and Defense Lead

Although sometimes viewed as a single economic unit with Dallas, the Fort Worth region has a unique and complementary industry profile, with a greater concentration in energy, transportation and defense. In the near term, those industries’ performance will help set the course for Fort Worth.

Federal budget constraints could, over the long term, limit the outlook for the historically powerful defense and security cluster and the 4 percent of the workforce it represents. Continuing price weakness in energy, which makes up 7.7 percent of the region’s employment and is classified as a star among Fort Worth’s clusters, will damp prospects and limit natural gas exploration along the Barnett Shale. Conversely, relatively low fuel prices will support demand for air travel and autos, such as the large SUVs that GM’s Arlington plant builds.

Fort Worth—Arlington Growth Outlook
Drivers Challenges
  • Manufacturing operations, defense industry installations and transportation facilities provide a strong foundation of well-paying jobs.
  • The government cluster continues to provide stability as the region’s population expands and the low unemployment rate serves as a lure to new residents.
  • Lower energy prices will continue to drive transportation growth.
  • Weakness in oil and gas prices will damp growth within the energy sector, which had benefited from its proximity to the Permian Basin and Barnett Shale.
  • A relatively less-well-educated populace may limit the kinds of businesses that select a Fort Worth location over one in Dallas.
  • The defense and security cluster and large military base are vulnerable to federal budget cuts in the future.


  1. The history of Fort Worth is taken from the Texas State Historical Association’s Handbook of Texas,
  2. Individual industry cluster shares do not add to 100 because some smaller industries at the three-digit-or-higher level in the North American Industry Classification System (NAICS) are included in multiple clusters, while some industries are not part of any of the clusters shown. Clusters include other related industries. For instance, semiconductor manufacturing (NAICS 3344) is included in both the advanced materials and information technology and telecommunications clusters.
  3. The 2014 population estimates are from the Census Bureau. The three largest MSAs are New York–Newark–Jersey City, Los Angeles–Long Beach–Anaheim and Chicago–Naperville–Elgin.
  4. Data are from the Bureau of Labor Statistics and Texas Workforce Commission and are seasonally adjusted by the Federal Reserve Bank of Dallas.
At the Heart of Texas