By Liz Segrist
Published Aug. 27, 2015
South Carolina is outpacing Alabama, Georgia, North Carolina and Washington in private sector aerospace employment growth, according to a study released today.
South Carolina’s private aerospace employment grew by 15.5% from 2010 to 2012, compared with 2.5% in Alabama, 10.7% in North Carolina and 11.2% in Washington, data show. Georgia’s aerospace employment was down 2.3% during that time, which is the most available data.
Although South Carolina had the highest employment growth during that time, its aerospace sector is still relatively small and new compared with that of other states, said Joey Von Nessen, research economist with the University of South Carolina’s Darla Moore School of Business. Boeing employs 80,000 workers in Washington compared to about 8,000 in South Carolina.
“Washington is still a player to watch,” Von Nessen said. “What are they doing and how do we learn from them to make ourselves more competitive in South Carolina?”
Von Nessen presented the Aerospace in the Southeast: South Carolina and Its Competitive Markets analysis today during the second annual S.C. Aerospace Conference and Expo in Columbia. He worked with the S.C. Council on Competitiveness and the Harvard Business School on this year’s study.
The study compares South Carolina’s private sector aerospace growth — aerospace manufacturing, air transportation and air transportation support services — to Alabama, Georgia, North Carolina and Washington state. The data excludes military aviation.
More than 17,000 workers are employed at 466 private sector aerospace firms in the state. About 72% of those employees work at aerospace manufacturers.
South Carolina ranked No. 3 in private sector aerospace firm growth, with an 18.7% increase, following North Carolina at 25.3% and Alabama at 21.3%. Washington ranked No. 4, up by 16.5%, according to the study.
South Carolina came in at No. 1 for growth in private aerospace sector annual revenue, up 15.5%, followed by Washington at 13.9%, data show.
“The findings show South Carolina is competing well with other states, but the findings also show there is an opportunity to increase firm growth and diversify the sectors within the industry,” Ann Marie Stieritz, president and CEO of the S.C. Council on Competitiveness, said in a statement.
At $104,000, compensation for aerospace workers in Washington is about $27,000 more than in South Carolina, which averages $77,000. South Carolina’s aerospace compensation average is within $10,000 of that of the other Southeastern states. Von Nessen said cost of living plays a role in the compensation disparities.
Within South Carolina, private sector firms are distributed fairly evenly. The Upstate has the largest share of firms at 38.8%, followed by the Lowcountry at 32.8% and the Midlands at 28.3%.
“Washington has enjoyed a growing aerospace cluster for nearly 100 years, which has allowed aerospace firms to open and expand into 35 of the state’s 39 counties,” Von Nessen said. “South Carolina firm activity is concentrated in the Charleston and Greenville regions; what can be done to spread aerospace growth around the state?”
Supply chain, workforce gaps
Deborah Cameron, director of aerospace initiatives at the Council on Competitiveness, said her group visited more than 50 aerospace firms throughout the state since last year’s aerospace conference.
They talked with employees about the challenges they are facing — workforce needs and supply chain gaps were the common thread, Cameron said.
Annual employment growth comparison
Sources: S.C. Council on Competitiveness, Harvard Business School, University of South Carolina Moore School of Business
Many firms need more metal finishing and metal processing suppliers in the state. Others want more original equipment manufacturers or tier-one firms to move into the state to support their operations.
More S.C. companies need to obtain their AS9100 certifications — a quality management system for the aerospace industry — in order to do more work for large OEMs like Boeing.
“We think that gap is closing,” Cameron said.
Most of the suppliers mentioned the need for more engineering, production and technical workers as they grow in South Carolina.
“We will use the findings included in this report to continue the conversations about the future of our fastest-growing industry cluster,” S.C. Commerce Secretary Bobby Hitt said. “Above all else, the report shows that aerospace is now a major pillar of South Carolina’s economy and will remain so for the foreseeable future.”
Last year’s study looked at the state’s entire aerospace cluster, which includes aerospace manufacturing, air transportation, air transportation support services and military aviation.
As of 2014, the aerospace sector employed 53,000 workers. The sector accounted for 102,000 workers and had a $17.4 billion economic impact in the state.
South Carolina’s private aerospace cluster had a multiplier effect of 2.2, meaning for every 10 jobs created in the cluster, 12 jobs were created elsewhere in the state’s economy. The state’s average multiplier across all industries is 1.8. The automotive sector has the highest multiplier effect in the state at 4.0, Von Nessen said.
“Aerospace is growing at a rate that’s comparable to automotive,” Von Nessen said, comparing BMW’s growth since the 1990s to Boeing’s recent growth. “The aerospace multiplier is lower today, but if it continues to grow as it is today, this shows were aerospace will go over the next decade or so.”
Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.