The Impact of the Aerospace
Industry in Washington State
February 12, 2014
WASHINGTON STATE AEROSPACE IMPACTS:
Research Questions and Data Collection
• Assess the economic impact of each
Boeing Commercial production line
in Washington State.
• Determine any returns accrued to
Washington State through
investments in aerospace.
2
WASHINGTON STATE AEROSPACE IMPACTS:
Research Questions and Data Collection
• Washington State Department of Revenue
• Boeing Commercial financial statements/reports
• Washington State Employment Security
Department
• SPEEA and IAM
• Washington State Input-Output Model
• Needed to determine:
• Wages per line
• Employment per line
• Average price (actual) per aircraft
• Direct purchases
3
1 WASHINGTON STATE AEROSPACE DIRECT IMPACTS
2 THE BOEING COMPANY IN WASHINGTON
3 WASHINGTON’S INVESTMENT IN AEROSPACE
WASHINGTON STATE AEROSPACE IMPACTS: employment
Washington State Aerospace Industry Employment
2007-2012, Annual
Employees
Related
In 2012 the aerospace
industry provided
132,500 jobs at 1,350
establishments.
Total jobs are up by 15,000
since 2007, showing
12.8% job growth.
Aerospace
Sources: Washington State Employment Security Department; Governor’s Office of Aerospace; Community Attributes Inc.
5
WASHINGTON STATE AEROSPACE IMPACTS: revenues
Washington State Aerospace Industry Revenues
2007-2012, Annual, in 2012 USD
Billions
Related
Total aerospace and
supporting industry
revenues grew by
$15.9 billion dollars,
representing 35%
growth between 2010
and 2012.
Aerospace
6
Sources: Washington State Department of Revenue; U.S. Bureau of Economic Analysis; Community Attributes Inc.
WASHINGTON STATE AEROSPACE IMPACTS: wages
Washington State Aerospace and Related Industry Wages
Annual, adjusted to billions 2012 $
Billions
Related
Total aerospace and
related industry wages
grew by $1.5 billion
dollars, showing 15%
growth between 2010
and 2012.
Aerospace and related
industries paid wages
equaled 11% of all wages
earned in Washington.
Aerospace
Sources: Washington State Employment Security Department; Governor’s Office of
Aerospace; U.S. Bureau of Labor Statistics; Community Attributes Inc.
7
WASHINGTON STATE AEROSPACE IMPACTS: exports
Washington Aerospace Exports
2007-2012, billions USD, adjusted to 2012 $
Billions
Aerospace industry
exports totaled
$37.1 billion dollars
in 2012, representing
49% of all
Washington
goods exports.
Sources: Washington State Department of Commerce; U.S. Bureau of Economic Analysis; Community Attributes Inc.
8
9
1 WASHINGTON STATE AEROSPACE IMPACTS
2 THE BOEING COMPANY IN WASHINGTON
3 WASHINGTON’S INVESTMENT IN AEROSPACE
THE BOEING COMPANY IN WASHINGTON: deliveries
Boeing Commercial Deliveries, 2007-2012
Airplanes
601
481
462
441
375
477
185
Domestic
129
159
169
154
140
416
322
287
348
293
Foreign
Boeing
Commercial
deliveries
totaled 601
airplanes in
2012, a growth
of 139
airplanes
since 2010.
235
11
Sources: Boeing Company; Community Attributes Inc.
THE BOEING COMPANY IN WASHINGTON: deliveries
Average Price per Aircraft, 2012
129
159
169
154
140
416
322
287
348
293
235
12
Sources: Boeing Company; Community Attributes Inc.
THE BOEING COMPANY IN WASHINGTON: employment
Boeing Employment in Washington
2007 - 2013
Employees
Other
Boeing provided
83,200 jobs in
2012, a
15%
growth in jobs
since 2010.
Manufacturing
The Boeing
Company
remains the
largest
employer in
Washington.
*Estimate by Community Attributes Inc.
**As of August 2013. Source: The Boeing Company.
For 2012 and 2013, breakouts by manufacturing and other are estimates.
Sources: Washington State Department of Revenue; The Boeing Company; Community Attributes Inc.
13
THE BOEING COMPANY IN WASHINGTON: employment
Employment Allocated by Aircraft Family, 2012
Number of workers; total estimated Boeing Employment in Washington
Employees
777 production
provided 19,700
jobs in 2012,
representing
Overhead
and Related
27% of Boeing
Commercial
employment.
Assigned
to Program
14
Source: Industry sources; Community Attributes Inc.
THE BOEING COMPANY IN WASHINGTON: wages
Wages by Aircraft Family, 2012
Billions $, including benefits
Billions
737 production provided
an estimated $2.7
billion in wages in
2012.
Combined wages from
aircraft production totaled
$9.5 billion in 2012,
including benefits.
15
Sources: Industry sources; Community Attributes Inc.
THE BOEING COMPANY IN WASHINGTON: employment
Direct Impacts by Aircraft Family, 2012
777 production provided 19,800
jobs in 2012, representing 27% of
Boeing Commercial employment.
Program
737
747
767
777
787
Total
Jobs
Direct Jobs
Supporting within
Boeing
9,600
6,200
5,100
12,100
14,000
47,000
10,900
3,200
1,400
7,600
2,800
25,900
Direct Wages &
Benefits
($ billions)
Estimated
Direct Tax
Payments
($ millions)
$2.7
$1.2
$0.9
$2.6
$2.3
$9.7
$56.5
$16.6
$7.3
$39.2
$13.9
$133.5
16
Source: Industry sources; Community Attributes Inc.
THE BOEING COMPANY IN WASHINGTON: Impacts
Direct Impacts by Aircraft Family, 2012
777 production
provided 19,800
jobs in 2012,
representing
27% of Boeing
Commercial
employment.
17
Source: Industry sources; Community Attributes Inc.
1 WASHINGTON STATE AEROSPACE IMPACTS
2 THE BOEING COMPANY IN WASHINGTON
3 WASHINGTON’S INVESTMENT IN AEROSPACE
WASHINGTON’S INVESTMENT IN AEROSPACE: tax incentives
Type of Incentive
Preferential B&O tax rate
Eligibility
•
•
•
•
Rate
Manufacturers & processors for hire
Aerospace product development
businesses
Aerospace products
Certificated FAR part 145 repair
stations
38-50% reduced rate
B&O tax credit for
aerospace product
development
•
•
•
Supplies
Cost of FAA certification
Computer & processing expenses
Amount of qualified
expenditures x 1.5%
Sales and use tax
exemption on computer
hardware and
peripherals
•
•
•
•
•
Hardware
Software
Plotters
Switches
Hubs
Full exemption
B&O tax credit for
property taxes/leasehold
taxes paid
•
•
•
•
Manufacturers
Tooling manufacturers
Certified FAR part 145 repair stations
Aerospace product development
businesses
B&O tax credit equal to
leasehold taxes
3 WASHINGTON’S INVESTMENT IN AEROSPACE: firm locations
WASHINGTON’S INVESTMENT IN AEROSPACE: tax investments
Aerospace Industry Tax Investments by Washington State
Actuals, estimates (2013), $millions, based on fiscal year
Millions
Sales & Use Tax Exemption for
Computers Used in Development
& Design
B&O Tax Credit for Property
Taxes on Land/Buildings
B&O Tax Credit for Aerospace
Manufacturers for Preproduction
Development Expenditures
B&O Tax Credit for Aerospace
Product Development
Preferential B&O Rate FAR
Certified Repair Station
Between fiscal
years 2007 and
2013, tax
investments in
aerospace from
the State totaled
over $900
million.
Preferential B&O Rate for Mfg,
Wholesale and Retail of
Commercial Aircraft
Source: Washington State Department of Revenue; Community Attributes Inc.
22
WASHINGTON’S INVESTMENT IN AEROSPACE: other investments
Key Non-Tax Investments, 2003 through 2012
Workforce
Training
Capital/Land
Improvement
Other
Total
PROJECT OLYMPUS
$23,500,000
$340,500,000
$2,285,000
$366,285,000
PROJECT PEGASUS
$9,550,000
N/A
N/A
$9,550,000
TOTAL $33,050,000
$340,500,000
$2,285,000
$375,835,000
Source: Community Attributes Inc.
23
WASHINGTON’S INVESTMENT IN AEROSPACE: fiscal benefits
State Fiscal Benefits from Boeing Operations, 2004 - 2012
Adjusted to 2012 $ USD, Millions
Millions
Between 2004 and
2012, Boeing’s
commercial activities
supported nearly
Other Taxes
$4.1 billion in
State fiscal
revenues.
Sales Tax
In 2012, Boeing
Commercial
operations accounted
for 7.4% of all
B&O tax collected
B&O Tax
by the State.
24
Sources: Washington State Department of Revenue; Washington State Office of Financial Management; Community Attributes Inc.
WASHINGTON’S INVESTMENT IN AEROSPACE: fiscal benefits, 2012
25
CONCLUSIONS
Boeing’s largest impacts come from induced impacts, i.e., spending of
income throughout the economy. Induced effects accounted for
104,200 total jobs, compared with 31,700 through indirect effects.
In 2012, Boeing Commercial operations accounted for 7.4%
of all
B&O tax collected by the State.
Boeing Commercial’s fiscal impact significant, to the tune of nearly
$600 million in 2012.
26
CONCLUSIONS
27
WASHINGTON’S INVESTMENT IN AEROSPACE: charitable contributions
In 2012, the Boeing Company, its
employees, and retirees made
charitable contributions of $51.8
million in Washington State.
Since 2000, Boeing has made 84
research grants to WSU
worth $5.7 million.
Boeing executives sit on the Board
of Directors for over 100 local
non-profits.
Sources: The Boeing Company; Community Attributes Inc.
28