DECD: Industry Profile: Aerospace

Industry Profile: Aerospace - August 2001

By Mark Prisloe, Senior Economist, DECD

Introduction

Long a backbone of Connecticut’s manufacturing sector, the aerospace industry is a sustained contributor to employment, output, exports, and the Connecticut economy. Since the beginning of the aerospace age, Connecticut’s aerospace manufacturers have enjoyed a long-standing reputation for supplying high quality products. Those products include aircraft and parts, aircraft engines, helicopters, and other aerospace components.

Employment

Employment in Connecticut’s aerospace industry (Standard Industrial Classification code 372) was 33,898 in 2000, the latest year for which data are available. According to the Connecticut Department of Labor, the State’s total manufacturing employment level showed a steady decline from 343,099 in 1990 to 262,508 in 2000, or a drop of 23.5 percent. Aerospace, a major component of the manufacturing sector, demonstrated a more pronounced downward trend during the same period, having dropped nearly twice as much (table). Dramatic declines occurred during the 1993-95 period, followed by job gains in 1997 and 1998, before falling again in the last two years (chart). Moreover, aerospace jobs, which accounted for 17.8 percent of the total manufacturing industry in 1990, shrank over the decade to 12.9 percent in 2000.

Wages

Over the 1990-2000 period, the average annual wage per worker in the aerospace manufacturing industry grew 63 percent, while the overall private sector’s rose by 60 percent. The aerospace industry paid an average of $68,737 per worker in 2000, which was almost 15 percent higher than the manufacturing sector overall.

Aerospace and Total Manufacturing Employment Index

Establishments

In 1990, the Connecticut aerospace industry had 164 establishments. During the 1989-1992 recession that number steadily rose and reached a high of 190 in 1992. In fact, over the ten years between 1990 and 2000, the number of establishments grew by 5.5 percent, while total manufacturing saw a 7.9 percent decline. While these numbers reflect the experience of businesses with a primary Standard Industrial Classification (SIC) code of 372, they do not include the numerous suppliers to the aerospace industry that may be categorized under another primary SIC. From industry sources, for example, it is clear that Connecticut has a growing number of aerospace component manufacturers.

Aerospace Core Created

A core group of Aerospace Components Manufacturers (ACM) has initiated a program to strengthen Connecticut’s aerospace cluster. Through support from the Connecticut Department of Economic and Community Development (DECD), a new non-profit 501C(3) organization has been formed to manage the group’s programs under the direction of a six-member board of directors, all of whom are company presidents. A two-year plan aimed at achieving worldwide recognition as a premier source of aerospace components is being financed by DECD’s $125,000 investment and will be leveraged with over $500,000 in industry support.

Expanding World Market

A $1.3 trillion world market for aerospace products is forecasted to materialize by 2018. This expanded global market offers excellent opportunities for Connecticut’s small and medium sized aerospace manufacturers. In terms of dollar volume, transportation equipment manufacturing (SIC 37), which includes the aerospace industry, remains Connecticut’s single largest merchandise export. In 2000, this industry alone exported over $2.2 billion, which represented 38 percent of total merchandise exports.

Output and Productivity

Connecticut’s aerospace industry is among the most productive in the world. As measured by the dollar value of final output, gross state product (GSP) in the State’s aerospace industry in 1999 amounted to $4.3 billion. Industry sales have been on an expanding trajectory since the recovery began. Connecticut’s productivity, or dollar value of output per employee, was at $125,527 in 1999, making it among the highest in the nation.

Aerospace Industry Covered Establishments, Employment, and Wages 1990 and 2000, Annual Averages

Industry Code. Description

Establishments

Employment

Wages

1990

2000

90-00 % Chg

1990

2000

90-00 Chg

1990

2000

90-00 % Chg

No.

%

Total Private Industries

100,215

104,569

4.3

1,420,078

1,462,534

42,456

3.0

$28,841

$46,027

59.6

Total Mfg

6,417

5,907

-7.9

343,099

262,508

-80,591

-23.5

$35,696

$59,966

68.0

37. Trans Equipment

245

260

6.1

80,718

45,373

-35,345

-43.8

$39,447

$64,084

62.5

372. Aircraft and Parts (Aerospace)

164

173

5.5

61,029

33,898

-27,131

-44.5

$42,177

$68,737

63.0