Aug. 19--Aerospace is South Carolina's stealthiest industry, contributing more than $17.4 billion to the state's economy each year and growing at six times the rate of the state as a whole, according to a report released Tuesday by the University of South Carolina.
"Aerospace is typically represented by Boeing as the poster child," said USC economist Joseph Von Nessen of the Moore School of Business, which compiled the study. But its influence has spread across every region of the state as a major economic driver, he said.
The study shows just how much the industry has been flying under the radar for many, he said.
There are 466 private aerospace firms in the state, led by Boeing in North Charleston, that are fully or partially involved in aerospace or commercial aviation, the report shows. Those firms, which include airports and other commercial aviation facilities, employ 17,114 people and contribute $8 billion annually to the state's economy.
In addition, the state's four military air bases in Eastover, Sumter, Charleston and Beaufort employ another 36,654 people and pump $9.4 billion into the economy, the report shows.
And the aerospace industry is growing jobs at 11.4 percent a year compared to the state average of 1.9 percent a year, the study shows, which translates into 1,000 new jobs per year, matching the job growth of South Carolina's robust automotive manufacturing sector.
"It's not just Boeing," Von Nessen said. "It's a growing cluster. We have a diversity of firms that are contributing."
The first-of-its kind report is entitled "Uncovering the Stealth Cluster: The Economic Impact of Civilian and Military Aerospace on South Carolina." The study is a partnership between the Moore School, USC's Ronald E. McNair Center for Aerospace Innovation and Research, the S.C. Department of Commerce and New Carolina, South Carolina's Council on Competitiveness.
According to the report, aerospace has one of the highest employment growth rates among all industries in South Carolina over the last decade.
From 2002 to 2012, annual employment growth in the sector averaged 4.2 percent, compared to just 0.3 percent for the state as a whole. Since 2010, when the state's economy began recovering from the recent recession, annual employment growth in the aerospace cluster has averaged 11.4 percent, which is approximately six times higher than the 1.9 percent average annual growth rate for the state overall.
"Aerospace has become a key factor in our recovery," Von Nessen said.
Aerospace's impact on the economy is higher the $16 billion that the military as a whole provides the state, but still well short of the $27 billion contributed by the automotive industry.
While Boeing is only a part of the aerospace picture in the state, it's a very important one, said Commerce Secretary Bobby Hitt.
"Much like BMW accelerated the growth of the state's automotive industry, South Carolina's aerospace industry has grown exponentially since Boeing selected the Charleston region in 2009," Hitt said in a press release. "And the 'Boeing boost' continues as we recruit major global suppliers -- like carbon fiber manufacturer Toray Industries -- that serve the aerospace cluster in South Carolina."
The Beaufort and Charleston regions, particularly around Boeing's home base in North Charleston have a higher concentration of aerospace employment than in any other region of South Carolina. This is due to a strong presence of both private sector and military employment.
The Midlands ranks third because of Shaw Air Force Base in Sumter, which hosts the largest F-16 fighter jet wing in the U.S. Air Force, and McEntire Joint National Guard Base in Eastover, which also is home to an F-16 wing, the Swamp Foxes of the S.C. Air National Guard.
The Upstate region has the highest concentration of aerospace employment among areas without a major military aviation facility, and ranks fourth overall behind Charleston, Beaufort and Columbia.
Von Nessen said the military was included in the report because it is a customer for many of the state's aerospace and aviation vendors and companies.
"It's all intertwined," he said.
Because of the large focus of aircraft manufacturing on advanced composite materials, precision metal parts and systems integration, the aerospace jobs are typically high-skill, high-wage jobs, the report shows. The average aerospace job in South Carolina pays $70,749 a year, the report shows, which is 72 percent higher than the average total compensation in South Carolina -- $41,206 -- and 46 percent higher than manufacturing jobs, $48,453.
The industry contributes $10.4 billion to the state's gross product and brings in more than $532 million in tax revenue annually for the state.
"With a sizable statewide economic footprint, a uniquely high rate of employment growth, and a rapidly expanding supply chain, increases in the aerospace cluster's employment and income multiplier effects will occur over time," the report states. "These increased multiplier effects, in turn, will cause subsequent aerospace cluster expansions to generate even larger economic gains for South Carolina."
To help with that growth, USC's McNair Center is developing an undergraduate aerospace degree, said executive director Martin Keaney. And the Commerce Department is locating sites and infrastructure for future aerospace recruitment.
"We're trying to put some skin into the game in product development," Commerce's Allison Skipper said.
Von Nessen predicted that these effort and the draw of Boeing should continue to provide significant job growth in the industry.
"If we can preserve that rate of growth (11.4 percent) over the next four or five years, aerospace can really be a pillar in South Carolina's economic development," he said.
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