The metal-working industry has historically been Toledo's economic base, with a great tradition in the manufacturing of swords and knives and a significant production of razor blades, medical devices and electrical products. Soap and toothpaste industries, flour milling, glass and ceramics have also been important.
According to the Statistical Institute of Castilla-La Mancha, in 2007 the distribution of employment by sectors of occupation was as follows: 86.5% of the population engaged in the services, 6.6% in construction, 5.4% in industry and 1.5% in agriculture and livestock.
The manufacture of swords in the city of Toledo goes back to Roman times, but it was underMoorish rule and during the Reconquista that Toledo and its guild of sword-makers played a key role. Between the 15th and 17th centuries the Toledo sword-making industry enjoyed a great boom, to the point where its products came to be regarded as the best in Europe. Swords and daggers were made by individual craftsmen, although the sword-makers guild oversaw their quality. In the late 17th and early 18th century production began to decline, prompting the creation of the Royal Arms Factory in 1761 by order of King Carlos III. The Royal Factory brought together all the sword-makers guilds of the city and it was located in the former mint. In 1777, recognizing the need to expand the space, Carlos III commissioned the architect Sabatini to construct a new building on the outskirts of the city. This was the beginning of several phases of expansion. Its importance was such that it eventually developed into a city within the city of Toledo.
In the 20th century, the production of knives and swords for the army was reduced to cavalry weapons only, and after the Spanish Civil War, to the supply of swords to the officers and NCOs of the various military units. Following the closure of the factory in the 1980s, the building was renovated to house the campus of the Technological University of