The Seattle Metropolitan Chamber of Commerce commissioned a study on the bright future of the aerospace economy.
The economic influence of the aerospace industry in the Puget Sound region, Washington state, and beyond is of considerable consequence. The aerospace industry significantly extends its influence across various sectors of the regional economy, much like the far-reaching tentacles of the giant Pacific octopus of Puget Sound. Recently, the Seattle Metropolitan Chamber of Commerce and Community Attributes, Inc. jointly undertook a comprehensive data study to present pertinent insights into the far-reaching economic implications. They meticulously assessed positive and negative aspects over the preceding years, analyzed the data, and employed narratives and visuals to articulate an optimistic outlook for the region.
President and CEO of Community Attributes, Inc., Chris Mefford, whose business produced the report, has previously worked with the Seattle Metro Chamber. Rachel Smith, president and CEO of the Seattle Chamber, along with The Boeing Company, state and federal agencies, and regional trade groups, weighed in on the consequence of the aerospace economy. The impacts of the pandemic and the serious Boeing incidents this year are faced head on in the report. Finally, due to these impacts, the supporting service providers of the 77,400 aerospace employees in the state show both the good and bad implications for retail, healthcare, food services, and consumer goods.
Smith shared that, as a Chamber, they are keen on a strong economic environment. She said, “Prosperity is good, and people need access to it.” As an organization, they cater to their members and engage with groups like Community Attributes to take the pulse of the region. She added, “We want to offer a high quality of life and participate civically to enhance the region for everyone. We are a convener and coalition builder for the region.” She said there are high-quality opportunities for the business community to engage with each other, and she wants to show the region that it is globally competitive.
The report and what is key.
The aerospace impact in the region is massive. The deep reservoir of the economy is fed by the aerospace industry, generating in 2023 “$71 billion in business revenues, supported 194,000 jobs and returned $19.4 billion in income to Washington employees,” according to the press page on www.seattlechamber.com.
Ongoing business and re-investment into the economy from every aerospace employee and the service-providing industry continue to feed the beast. In other words, Western Washington, and beyond, across the state of Washington and into the rest of the Pacific Northwest, relies on commercial airplane orders. The stats say, “The industry is on a path to recovery with a five-year peak in 2023 of 1,456 new Boeing airplane orders and, as of June 30, 2024, an official unfilled order of 6,156 airplanes will provide years of work ahead for Boeing employees and its suppliers.”
The report is impactful, and Smith said it came about through various partners, including Boeing, “It is hard to overstate the impact of Boeing. The effect is huge: $70 billion in business revenues, 200,000 jobs in total, 77,000 directly, $20 billion in labor income, and money going to the state in tax revenue for services daily. I think and talk about the notation of good jobs: taking care of families, paying taxes, contributing revenue, and giving back to the community.” She reflected upon the volunteering and charitable contributions borne of the aerospace industry, “These good jobs amplify the companies’ community impact personally and more broadly.”
Community Attributes, Inc. and Mefford, the report architects, said, “We think it is important to ground people’s perspectives in objective data, especially in these changing economic days; it is important to tell their story effectively.” He said they’ve done similar aerospace studies a handful of times. “Every time we’ve done that, the context has changed.” The aerospace industry is important in context, and “Updating the regional story with actual data is important.”
He said the snapshot has recently changed with the pandemic and other commercial aerospace challenges. This time, they focused on the suppliers servicing the aerospace industry’s employees — car dealerships, restaurants, healthcare, and other service-oriented businesses. They also interviewed trade organizations that support the industry, like the Pacific Northwest Aerospace Alliance (PNAA) and the Aerospace Futures Alliance (AFA), to weigh in on the needs of their industry membership.
Nikki Malcom, the CEO and executive director of PNAA, was interviewed for the report on behalf of her membership. PNAA has 230 members, and as a nonprofit, its objective is to promote the growth and global competitiveness of the regional aerospace cluster.
She said the impact of COVID-19 and industry challenges have led to 30 to 40 percent layoffs by regional aerospace suppliers.
Malcom indicated that the loss of institutional knowledge caused by the layoffs of skilled labor has impacted the supply chain.
She added that the suppliers in the PNAA membership are looking forward to future stability through a ramp up of the Boeing build rate. Many are creating in-house training programs to re-establish a skilled labor base and are working with long-term high school and apprenticeship programs, like the Advanced Manufacturing Apprenticeships provided by Aerospace Joint Apprenticeship Committee (AJAC).
She said the report demonstrates “economic impact beyond the aerospace industry. For every job created in the industry, two more jobs are created in the community. This shows the true economic impact of the industry. All the people in Everett eat out, buy cars, and see doctors; all that money gets reinvested in the economy.”
Report outcomes and why they matter.
Bill McSherry, vice president of Boeing Government Operations, shared, “Washington state and the aerospace industry share a deep-rooted connection, with Boeing at its core, and we continue to drive Washington’s economy forward. Aerospace creates jobs for 194,000 Washingtonians, and 80 percent of the state’s aerospace economic activity comes from Boeing. Aerospace’s connections in Washington are as strong as ever.”
Because the report was data intrinsic, Mefford weighed in on data sources to demonstrate report validity. He said one source of the data included in the report came from the state of Washington. He said, “The state of Washington does a good job publishing data; the challenge is to be narrow geographically. The Employment Security Department (also) communicates well; they update the data every month. The challenge with jobs data is there are always five different reports; they all mean something different, but the June 2024 info shows statewide aerospace at 82,000 jobs in June; they break it down by county, and King and Pierce counties have good numbers.” He said the Department of Revenue data is also good because they realize limitations and how to parse it.
But as far as data outcomes, Mefford said, “The aerospace industry is well defined. There are not a lot of pieces outside of the industry that are surprising. The 777 coming out of Everett and what they can produce, such as the Boeing Company in Snohomish County, Moses Lake, Spokane, etc., are a lot of defense contracts. Boeing commercial aerospace is one side, and defense contracts are important; there are defense contracts throughout the state of Washington in the defense industry, (which are) very important to the state, along with independent maintenance repair and overhaul (MRO) companies and those who work for the airlines, and small and medium-sized jets. The building of the different parts and interiors and showing specific systems are very complex,” which he said all play a part in the overall aerospace economy.
On the Chamber side, they said the report was positive. Smith added, “It is not too complicated to shed light on how important these companies are in the region; their continued growth will strengthen the economy coming out of the pandemic to put some daylight on things. Aerospace is a cornerstone of Washington’s economy; it also shows how the aerospace industry uplifts small businesses and employee support for local retailers and restaurants.”
Mefford added the positive outcomes included Boeing’s commitment to Washington communities. He added that the challenges to include COVID have been a part of the story, “No industry was more disrupted than the air travel industry, back to almost 2019.” He said the turnaround is a very positive thing.
Going forward as a community.
Mefford said there is a feeling of looking for a bright future in the aerospace industry. Malcom said from PNAA’s perspective, “Looking forward, both Boeing and the supply chain will need to collaborate to solve challenges and mitigate risk.”
The aerospace industry’s economic tentacles stretch around Washington state and beyond, virtually reaching tens of thousands of households and service businesses. Recent industry challenges have hampered the workforce and industry reputation, but they are on the upswing, and intelligent industry data backs our hopes and dreams.
