Oregon’s Aerospace Products and Parts Manufacturing Industry

by Dallas Fridley

February 25, 2019

Aerospace is a high profile industry, particularly so in Washington state, where the world’s largest aerospace company and the largest exporter in the U.S. is based. The Boeing Company is in fact the largest private employer in Washington, while hosting nearly half of the company’s global workforce. Oregon’s aerospace industry is comparatively small, making it relatively easy to mention every company by name, as shown in the accompanying list.

Oregon’s Aerospace Employers

Oregon’s aerospace industry included 44 business units in 2018 spread out across 12 counties. With about 3,300 jobs over the first three quarters of 2018, aerospace was similar in size to Oregon’s motor vehicle body and trailer manufacturing industry. A handful of firms dominated Oregon’s aerospace industry, limiting details to statewide employment.
The Oregon portion of the Portland MSA (Clackamas, Columbia, Multnomah, Washington and Yamhill counties) was home to 16 aerospace employers, Deschutes County hosted 15 units and Lane County was the home base for five firms. Other Oregon counties with at least one aerospace employer included Coos, Douglas, Hood River, Jackson, and Marion.

State and National Aerospace Employment

Oregon’s aerospace industry averaged more than 3,200 jobs in 2017, about 200 above its 2008 pre-recession employment. Although aerospace lost over 500 jobs in 2009, the industry recovered its losses by 2012, rising to about 3,100. Aerospace employment hovered just above 3,200 in 2014 through 2017 and the industry averaged about 3,300 over the first nine months of 2018.
Nationally, aerospace employment averaged about 484,400 jobs in 2017 with just over 3,200 employer units. In Oregon, aerospace produced a location quotient of just 0.51 in 2017 – indicating that the industry would need to essentially double its employment to match the U.S. profile. Based on location quotients (LQ), Washington led the U.S. with an LQ of 7.64, nearly 84,000 jobs and 193 employer units. Other top states included Kansas, with an LQ of 6.45, Connecticut (5.2), Arizona (2.85) and Alabama (1.95). Together, the top five U.S. states represented nearly 38 percent of all U.S. aerospace jobs in 2017, totaling about 182,100. Just 14 U.S. states produced an aerospace LQ of 1.0 or higher, while 22 states ranked below Oregon’s LQ of 0.51.

Payroll and Wages

Oregon aerospace manufacturers paid an average $84,901 in 2017, about $34,400 above (+68%) Oregon’s $50,483 private industry average. Oregon’s manufacturing industry paid an average $68,152 in 2017, producing a gap of about $16,700 or 25 percent for aerospace.

Very few manufacturing industries in Oregon offered higher average pay than aerospace in 2017. A few industries just below aerospace included paper mills ($79,843), agricultural chemicals except fertilizer ($80,106), ferrous metal foundries ($80,869) and adhesive manufacturing ($81,045). A handful of manufacturing industries exceeded aerospace pay, including industrial gas manufacturing ($85,680), computers and peripheral equipment ($86,102), electronic instruments ($93,231), resin and synthetic rubber manufacturing ($102,484), and semiconductor and electrical components ($143,215).

Wage growth in aerospace has been volatile, rising by 11.8 percent or nearly $7,600 in 2009 and falling by 3.3 percent or about $2,700 in 2015. Since 2008, average pay in aerospace rose by 32.5 percent or about $20,800. Oregon’s manufacturing industry pay rose by $15,021 since 2008, an increase of 28.3 percent.

Oregon’s aerospace payroll totaled $273.4 million in 2017. Washington boasted a payroll of $9.6 billion or nearly 20 percent of the U.S. total. While leading the U.S. in total employment and total payroll, Washington’s aerospace industry pay averaged $113,798 in 2017, ranking fourth. Colorado’s aerospace industry pay led the U.S. in 2017, averaging $135,479. Although Colorado’s aerospace industry produced an LQ of 1.1 in 2017, it hosted several high profile employers, including Boeing, Lockheed Martin, and Northrop Grumman to name a few. The U.S. aerospace industry paid an average $100,791 in 2017.

Employment Forecast

According to the most recent BLS national industry employment forecast, which covers 2016-2026, aerospace is expected to experience a loss of about 2 percent or 9,800 jobs. Over 2006-2016, aerospace grew by just 3 percent, rising by 14,900 jobs. In addition to its employment forecast, the BLS also reports output by industry. Unlike employment, the aerospace industry’s output is expected to rise at an annual rate of 2.3 percent over 2016-2026, slightly below its 2006-2016 increase of 2.9 percent annually.

The Oregon employment forecast, which covers 2017-2027, doesn’t go into enough detail to breakout aerospace, however the transportation equipment manufacturing group is expected to grow by 8 percent or 900 jobs to total 12,800.

Occupational Employment

Occupational estimates for aerospace provide an outlook for employment and wages at the both the state and national level. Across all occupations, the U.S. aerospace industry produced a median wage of $35.27 per hour and an average of $39.30. On an annual basis, U.S. aerospace wages averaged $81,740 in 2017. Oregon’s aerospace occupations produced a median wage of $34.51 (2018), nearly $5 below the U.S median. Oregon’s average aerospace wage, at $36.28 (2018), fell about $4 below the U.S. average, while its annual wage averaged $75,456.
It is important to note that occupational wage estimates exclude overtime and nonproduction bonus pay. In 2017, Boeing paid out a record $600 million in bonus pay to its Washington state workforce. Boeing earned a profit of $8.2 billion in 2017, up from a paltry $4.9 billion in 2016.

At the national level, production occupations represented nearly one-third (32.2%) of aerospace’s jobs, followed by architectural and engineering occupations, with just over 21 percent. Business and financial operations occupations (11.3%), computer and mathematical (8.6%), and installation, maintenance and repair (8.3%) rounded out the top five occupational groups. Together, the top five occupational groups comprised nearly three-in-four U.S. aerospace jobs (73%).

In Oregon, production occupations led aerospace, representing well over half (54.2%) of its jobs in 2017. Architectural and engineering occupations ranked second, with 10.4 percent.

Production occupations typically require a high school diploma, although postsecondary training is a must for certain production occupations, including numerical tool and process control programmers, and computer-controlled machine tool operators. Architecture and engineering occupations were led by industrial engineers and aerospace engineers – each of which required a master’s degree to qualify.

In Oregon, occupations with a bachelor’s degree or higher as the competitive education requirement represented 30 percent of all aerospace jobs in 2017 (Chart 2), eight percent required an associate’s degree and 19 percent needed postsecondary (non-degree) training. The remaining 43 percent of Oregon’s aerospace jobs required only a high school diploma or equivalent. The industry’s STEM occupational profile (Science, Technology, Engineering, and Math) produced an encouraging 40/60 split for aerospace, well above the 22/78 split for all Oregon industries.

The Future of Aerospace in Oregon

Oregon’s aerospace industry was relatively small when compared with leading U.S. states, like Washington. Production occupations, which typically require some post-secondary training, dominated Oregon’s aerospace industry, representing more than half of its jobs. Architectural and engineering occupations, which typically require a Master’s degree, represented a much greater share of U.S. aerospace industry jobs. Oregon’s aerospace industry wages were relatively high when compared with other manufacturing industries. Still, U.S. aerospace industry wages exceeded Oregon’s average by about $16,000 or 19 percent. At the national level, aerospace isn’t expected to add jobs over 2016-2026, while its output forecast remains quite positive. Employment in Oregon’s transportation equipment manufacturing group, which includes aerospace, is forecast to rise by 8 percent over the decade.

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