2015 Economic Impact of Georgia’s Aerospace Industry...This 2015 economic impact study of...

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2015 ECONOMIC

IMPACT OF GEORGIA’S

AEROSPACE INDUSTRY

June 2017

Economic Impact Analysis of Georgia’s Aerospace Industry: 2015 Page 1

Table of Contents

Executive Summary 2

Section 1: Introduction 9

Section 2: Economic Impact of Aerospace in Georgia 12

Section 3. Fiscal Impact of Aerospace in Georgia 16

Section 4. Contribution of Aerospace to Georgia’s GDP 16

Section 5. Location of Aerospace Firms in Georgia 17

Section 6. Special Interest Aerospace Regions 17

Section 7. Unmanned Aircraft Systems Companies 22

Section 8. Space Companies 23

Appendix 1. Economic Impact by Regional Commission 24

Appendix 2: Methodology, Definitions, and References 28


Executive Summary

This 2015 economic impact study of aerospace related activity in the state of Georgia is an

update of similar economic studies commissioned by Georgia’s Center of Innovation for

Aerospace (COIA) to assess the industry’s contribution to the state’s economy in 2011 and

2013.

This analysis quantifies the level of economic activity conducted by the components of the

aerospace industry in 2015, estimates its fiscal impact, and quantifies the industry’s

contribution to the state’s Gross Domestic Product using an input-output economic model

and available industry data. The study also estimates the economic impact of aerospace

activities in four selected regions of the state and analyzes two small but emerging niches –

unmanned aircraft systems (UAS) and space related companies located in the state of

Georgia.

The aerospace industry continues to expand across the state, and saw significant growth

between 2013 and 2015. Aerospace direct employment increased by 10,632 or 12

percent in 2015 compared to 2013. The total economic impact of the industry is

estimated to be almost $64 billion in FY2015, an increase of 22% over 2013 results.

Direct output of aerospace industry increased by nearly $6.5 billion, an increase of 20

percent, from 2013 to 2015. Total output also increased by 25 percent between 2013

and 2015. The key findings of this study are shown below in Table E-1.

In 2015, the aerospace industry supported 268,232 jobs in Georgia, representing 6.5%

of the state’s total employment, contributing $29.3 billion to the state’s GDP (6 percent

of the total GDP). Wages and salaries of direct employment increased nearly $10 billion in

2015, an increase of $826 million (9 percent) from 2013. The wages and salaries of total

aerospace related jobs also grew by $2.8 billion (18 percent) in the same period. Each job

in the aerospace industry supported 1.71 additional jobs in Georgia in 2015. Table

E-1 provides a summary of the key metrics.

Table E-1: Georgia’s Aerospace Industry Economic Activity: 2015

Direct Indirect Induced Total

Employment 98,991 71,277 97,964 268,232

Wages &

Salaries $9,986,897,729 $4,184,769,135 $4,212,834,918 $18,384,501,782

Output $38,909,655,978 $11,406,271,664 $13,470,173,137 $63,786,100,779


Definition of Aerospace Industry in Georgia

The Georgia Center of Innovation for Aerospace uses “Aerospace” as an inclusive term

covering the full range of life cycle activities for vehicles that fly in the air or in space. To

measure the economic impact of the broad span of these activities in this analysis, this

study’s aerospace industry includes the six-digit North American Industrial Classification

System (NAICS) industries shown in Table E-2 to describe their operations. The data used

in this analysis were carefully examined and tailored to exclude any non-aerospace related

companies and organizations.

Economic Impact

The aerospace industry, as defined by the NAICS codes shown on page 2 and tailored to

exclude non-aerospace firms, employed 98,991 workers in 2015. This estimate includes

civil service employment at Robins AFB, Dobbins AFRB and Moody AFB, which together

comprise nearly 15 percent of the total direct employment in aerospace industry.

Employees in the aerospace industry were paid nearly $10 billion in wages and salaries

and generated an economic output of $38.9 billion in 2015.

While a large share of the impacts is attributed to direct employment, the total economic

impact (direct, indirect and induced) of aerospace industry is significant. The ongoing

Table E-2: Aerospace Industry Definition Components by NAICS Code

Sector Category Sector Category

Soil preparation, planting, and cultivating Support Fueling aircraft (except on contract basis) Support

Forestry Services (Crops spraying) Support Durable goods agents and brokers,

wholesale trade Support

Tire manufacturing, except retreading Support Scheduled passenger air transportation Core

Insulated wire or cable made in aluminum

wire Support Scheduled freight air transportation Core

Aircraft and automotive wire or cable made

from purchased copper in wire Support Nonscheduled air passenger chartering Core

Hardware manufacturing Core Nonscheduled air freight chartering Core

Machine Shops Core Other nonscheduled air transportation Core

Metal Coating Support Air traffic control Core

Electroplating, Plating, polishing Support Other airport operations Core

Fluid power valve and hose fitting mfg. Support Other support activities for air transport Core

Bearing Manufacturing Support Applications software programming

services, custom computer Support

Overhead cranes, hoists, and monorail

systems Support

Computer hardware consulting services or

consultants Support

Industrial truck, trailer, and stacker mfg. Support Business management consulting services Support

Search, detection, and navigation

instruments Core Other physical and biological research Support

Motor vehicle seating and interior trim mfg. Core Aircraft janitorial services Support

Aircraft manufacturing Core Flight training Support

Aircraft engine and engine parts mfg. Core Other technical and trade schools Support

Other aircraft parts and equipment Core Reupholstery and furniture repair Support

Gasket, packing, and sealing devices

manufacturing Support Transportation program administration Core

Other transport. goods merchant wholesalers Support


operations of aerospace generated ripple impacts throughout the state supporting an

additional 169,241 indirect and induced jobs with earnings of $8.4 billion and

economic output of $24.9 billion. This brings the total economic output to nearly

$63.8 billion (see Table E-1).

Study findings show that wages of aerospace employees are higher than Georgia’s overall

average wages of all industries. The 2015 average wage rate, including benefits, of

aerospace workers in Georgia was $100,887. The annual average wage rate without

benefits was $72,639 or 47 percent higher than the state’s overall average wage

rate of $49,5511.

The employment multiplier of aerospace industry in Georgia was 2.71 and the income

multiplier was 1.84. The industry’s high level of output and high wages, which translates

in higher spending and demand for goods and services, has resulted in higher multipliers

than the average multipliers of all sectors.

Fiscal Impact

The fiscal impact of aerospace industry was calculated by

estimating the revenues associated with the industry’s total

economic activity and subtracting the costs associated with

providing state services to Georgia’s households and companies associated with that

activity. Revenues included individual and corporate income taxes, sales and use taxes,

highway taxes, fees, and miscellaneous revenues. Costs included education; public health,

safety, and welfare; highways; administration; and miscellaneous. Table E-3 provides the

fiscal impact estimates based on the estimated industry total impacts. The aerospace

industry generated nearly $2 billion in revenues for the state budget in calendar

year 2015. When the costs of providing services to all employees were deducted from these

revenues, the net contribution of aerospace industry to the state revenues in 2015

was nearly $1.2 billion.

Table E-3: Aerospace Fiscal Impact Analysis: 2015

Annual State Government Revenues $1,951,040,627

Annual State Government Costs $796,665,601

Net Annual Revenues $1,154,375,026

1 Source: Quarterly Census of Employment and Wages - Bureau of Labor Statistics: 2015 Annual Averages, All establishment sizes.

Each job in the

aerospace industry

supported 1.71

additional jobs in

Georgia in 2015


Aerospace Industry and the State’s GDP

Aerospace industry is an

important driver of the

state’s economic activity. It

creates and supports high-

paying jobs for Georgia’s

citizens. In calendar year

2015, aerospace

supported 268,232 jobs

or 6.5 percent of the

state’ total

employment2, and it

contributed $29.3 billion

to the state’s GDP or 6

percent.

Location of

Aerospace Firms in

Georgia

Georgia‘s diverse

aerospace industry

includes a range of firms

that manufacture,

operate, service, and

repair aircraft, provide air

transportation, and

operate flight schools. The

map below shows the

location of aerospace

firms in Georgia. Firms

were geocoded and

mapped based on their

physical address.


Aerospace

Industry

6%

Figure E-1: Contribution of Aerospace Industry to the State of Georgia's GDP (2015)

Figure E-2: Georgia Aerospace Firms by County: 2015


Special Interest Aerospace Regions

As the map clearly shows, there are specific clusters of aerospace activity, which closely

correlate to administratively assigned economic development regions in Georgia3. As a

result, this study’s process of economic modeling and analysis was used to create a regional

view of economic impact in four selected regions:

Region 3 – Atlanta Regional Commission

Region 6 – Middle Georgia

Region 8 – River Valley

Region 12 – Coastal

Table E-4 shows a list of these regions and their respective counties.

The Atlanta Regional Commission (Region 3) is a 10-county area with the largest aerospace

activity compared to the other eleven regions. The economic impact that stemmed from

aerospace activities in 2015 accounts for more than 50 percent of the industry’s overall

economic impact in the state of Georgia. There were 56,757 jobs associated directly with

aerospace industry in 2015. These jobs generated $5.8 billion in direct wages and salaries

and $19 billion in output. Using a regional economic model, it is estimated that aerospace

activities created and supported 145,883 total jobs with earnings of nearly $10.7 billion,

and output of nearly $32.5 billion.

The Middle Georgia Region (Region 6) is comprised of eleven counties. Aerospace companies

employed 23,665 people in the region, who earned $2.3 billion in wages and salaries. The

3 The state’s regional commissions (RCs) function as multicounty planning and development

agencies. A map of RCs can be found here: http://www.georgia.org/business-resources/expand-a-

business-in-georgia/

Table E-4: Regional Commissions

Regions Counties

ATL Regional

Commission

(Region 3)

Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton, Gwinnett,

Henry, Rockdale

Middle Georgia (Region 6)

Baldwin, Bibb, Crawford, Houston, Jones, Monroe, Peach, Pulaski,

Putnam, Twiggs, Wilkinson

River Valley

(Region 8)

Chattahoochee, Clay, Crisp, Dooly, Harris, Macon, Marion, Muscogee,

Quitman, Randolph, Schley, Stewart, Sumter, Talbot, Taylor, Webster

Coastal (Region 12)

Bryan, Bulloch, Camden, Chatham, Effingham, Glynn, Liberty, Long,

McIntosh, Screven

Source: Georgia Department of Community Affairs

http://www.georgia.org/business-resources/expand-a-business-in-georgia/

http://www.georgia.org/business-resources/expand-a-business-in-georgia/


regions’ direct employment includes 13,600 jobs held by civilians employed at Robins Air

Force Base. Companies in this region generated nearly $8.5 billion in direct output during

that year. The total economic impact of aerospace activities in the region totaled to 48,928

jobs with wages and salaries of $3.2 billion and output of nearly $11.6 billion.

The River Valley Region (Region 8) encompasses 16 counties. In 2015, there were 899 direct

jobs with wages and salaries of $63.5 million related to aerospace activity in the region.

Direct output was $426.9 million. The overall industry economic impact in the region totals

to 1,724 jobs, $98.3 million in earnings and $537.7 million in output.

The Coastal Region (Region 12) includes 10 counties. This region is the state’s third largest

in terms of aerospace activity. There were 12,166 direct jobs connected to aerospace activity

in the region in 2015 that injected $1.4 billion of direct wage and salaries into the region’s

economy. Direct output was $9 billion. Individual and business spending supported

additional regional economic activity bringing the total economic impact to 28,367 jobs, $2.1

billion in wages and salaries and $11.2 billion in output.

Unmanned Aircraft Systems (UAS) Companies

Unmanned aircraft systems (UAS) have been used by the military for decades and the

technology has now been authorized by Congress and FAA regulations to be applicable

commercially. Commercial use of UAS has rapidly expanded since its initial authorization

in 2015. Given the growing commercial use of UAS in a wide variety of industries such as

agriculture, media and construction, this study quantified the economic impact of UAS

companies operating in the state of Georgia in 2015 to be used as a baseline in future

studies.

Using data provided by the Georgia Department of Labor, it was determined that UAS

companies employed 603 people in year 2015, who earned nearly $44 million in wages and

salaries and generated $130 million in economic activity. Spending by these companies and

their employees generated additional activity in other sectors of the state’s economy.

Overall, UAS companies in 2015 created and supported 1,330 jobs with wages & salaries of

$78 million and generated nearly $233 million of economic activity.

Table E-4: Economic Impact of Unmanned Space Systems Companies in Georgia:

2015 Direct Indirect Induced TOTAL

Employment 630 285 415 1,330

Wages &

Salaries $44,057,919 $16,135,058 $17,858,485 $78,051,462

Output $129,810,685 $45,616,544 $57,098,990 $232,526,219


Space Companies

An increasing number of companies in Georgia are actively pursuing activities in the space

industry. The Center of Innovation for Aerospace has determined that there were 12

companies with some activities in the space sector in 2015. These companies employed 915

employees that earned $122 million in wages and salaries and $333 million in economic

activity. Further spending by space companies and their employees resulted in supporting

an additional 1,548 indirect and induced jobs with wages of $74.3 million that resulted in

output of $220.7 million. Table E-5 shows the total impact of space companies in the state

of Georgia.

Table E-5: Economic Impact of Space Companies in Georgia: 2015


Employment 915 503 1,045 2,463

Wages &

Salaries $121,859,842 $29,362,220 $44,944,721 $196,166,783

Output $333,076,945 $79,006,681 $143,706,628 $555,790,254


SECTION 1

Introduction

The economic impact study of Georgia’s aerospace industry measures the industry’s

contribution to the state’s economy in 2015 by quantifying its activity in terms of economic

output, employment, and employee compensation. The study also assesses the industry’s

impact in state government costs and revenues. This report is an update of the economic

study conducted in 2013.

Economic output is typically defined as business revenues, and employee compensation is

defined as wages and salaries including benefits, paid by employers. Total activity is

generally referred to as the “multiplier effect.” This effect occurs whenever dollars are

brought into a state’s economy and recirculated before exciting or “leaking out.” Section 2

explains the methodology used to estimate total economic activity, and provides perspective

on how important these activities are in the overall Georgia economy. Section 3 quantifies

the industry’s impact on state government costs and revenues. Sections 4 and 5 compare

the economic activity of aerospace industry to the state’s GDP and show the location of

aerospace firms in Georgia, respectively. Section 6 is an addition to the 2013 study and it

quantifies the economic impact of unmanned space systems companies located and

operating in the state of Georgia. The latest study quantifies the economic impact of space

companies shown in Section 7.

Definition of the Aerospace Industry in Georgia

The aerospace industry in Georgia has many diverse functions including research,

development, manufacturing, maintenance/repair and overhaul, operations, education and

training. To collect data for this study, the North American Industry Classification System

(NAICS) was used to group and identify aerospace companies. In its classification scheme,

NAICS does not always explicitly identify aviation or aerospace activity, making a

consistent definition difficult. For example, soil preparation, NAICS 115112 includes a

wide range of activities related to irrigation, tilling and fertilization. Aerial application of

chemicals by aircraft is embedded in this classification. This tendency to embed aviation

and aerospace related products and services in broad NAICS classification causes the

definition of aerospace industry to vary by state. The NAICS classification data included in

this study were carefully examined by the Georgia Center of Innovation for Aerospace and

tailored to exclude any non-aerospace related companies and organizations. NAICS codes

used in this study are described in Table 1-1. The industry definition was updated in the

2013 study to include a more extensive list of sectors and make adjustments due to

revisions of the NAICS code classification. The list of sector was further expanded in the

2015 study.


Table 1-1: Aerospace Industry Definition Components by NAICS Code

Industry Sector

Industry

(NAICS)

Code

Category

Soil preparation, planting, and cultivating 115112 Support

Forestry Services (Crops spraying) 115310 Support

Tire manufacturing, except retreading 326211 Support

Insulated wire or cable made in aluminum wire 331318 Support

Aircraft and automotive wire or cable made from

purchased copper in wire 331420 Support

Hardware manufacturing 332510 Core

Machine Shops 332710 Core

Metal Coating 332812 Support

Electroplating, Plating, polishing 332813 Support

Fluid power valve and hose fitting mfg. 332912 Support

Bearing Manufacturing 332991 Support

Overhead cranes, hoists, and monorail systems 333923 Support

Industrial truck, trailer, and stacker mfg. 333924 Support

Search, detection, and navigation instruments 334511 Core

Motor vehicle seating and interior trim mfg. 336360 Core

Aircraft manufacturing 336411 Core

Aircraft engine and engine parts mfg. 336412 Core

Other aircraft parts and equipment 336413 Core

Gasket, packing, and sealing devices manufacturing 339991 Support

Other transport goods merchant wholesalers 423860 Support

Fueling aircraft (except on contract basis) 424720 Support

Durable goods agents and brokers, wholesale trade 425120 Support

Scheduled passenger air transportation 481111 Core

Scheduled freight air transportation 481112 Core

Nonscheduled air passenger chartering 481211 Core

Nonscheduled air freight chartering 481212 Core

Other nonscheduled air transportation 481219 Core

Air traffic control 488111 Core

Other airport operations 488119 Core

Other support activities for air transport 488190 Core

Applications software programming services, custom

computer 541511 Support

Computer hardware consulting services or consultants 541512 Support

Business management consulting services 541611 Support

Other physical and biological research 541712 Support

Aircraft janitorial services 561720 Support

Flight training 611512 Support

Other technical and trade schools 611519 Support

Reupholstery and furniture repair 811420 Support

Transportation program administration 926120 Core Source: North American Industrial Classification System (2012); Georgia Center of Innovation for Aerospace,

Georgia Tech’s Enterprise Innovation Institute


Top Aerospace Companies in Georgia Georgia is home to companies in three major aerospace market sectors: manufacturing, air

transportation and maintenance, repair and overhaul (MRO). With the world’s busiest

commercial airport, Georgia is home to Delta Air Lines and several of the largest air

carriers. Georgia is also the home base for two large aircraft manufacturers and a

multitude of their lower tier suppliers. With the large number of aircraft and airports,

Georgia is the natural home for several large Maintenance, Repair and Overhaul (MRO)

enterprises. Georgia is also home for companies and academic centers that do significant

amount of research and development for aerospace. Table 1-2 displays a list of the top 20

aerospace employers in Georgia.

Table 1-2. Top 20 Aerospace Employers in Georgia: FY 2015

No. Company Name

1. Delta Air Lines

2. Warner Robins Air Logistics Center (civilian employees only)

3. Lockheed Martin Aeronautics

4. Gulfstream Aerospace Corp.

5. ExpressJet

6. FAA

7. Southwest Airlines (Air Tran)

8. AirServ Security

9. MEGGITT

10. Moody Air Force Base (civilian only)

11. Dobbins Air Reserve Base (civilian only)

12. The Boeing Company

13. SITA

14. City of Atlanta-Hartsfield Jackson International Airport (HJIA)

15. Northrop Grumman Corp

16. ViaSat

17. PCC Airfoils LLC

18. Precision Components International Inc.

19. Triumph Aerostructures

20. Honeywell (formerly EMS Technologies)

Sources: Georgia Center of Innovation for Aerospace, GDEcD


SECTION 2

Economic Impact Analysis

The conceptual basis for estimating economic benefits of an industry is that resources

brought into a state’s economy by that industry raise the level of economic activity. The

aerospace industry provides a wide range of direct economic benefits in Georgia. These

benefits are measured by analyzing employment, income (wages & salaries), and output

(business revenues). From these direct impacts, multiplier effects are also evaluated, as

income and other spending are re-spent in the local economy thereby supporting increased

employment, income, and business revenues. These increases are estimated from an input-

output (I/O) economic model.

The analytical process of estimating the economic impacts (direct, indirect, and induced) of

aerospace in this study involved the following steps:

Direct employment for each sector (by NAICS code) was quantified. This study counted

the number of employees working for companies whose primary business supports the

aerospace industry in Georgia. The best source for employment and wages is the

employment security data collected and maintained by the Georgia Department of

Labor. Commonly called ES202 data, it has the advantage of being current, allowing

an estimate of the economic benefits occurring in 2014. It has the drawback, however,

of not including single proprietorships (because they have no employees).

Review of employment data was a critical part of this analysis due to the broad definition

of NAICS codes for aerospace sectors. Employment was verified by calling individual

firms (calls were conducted by Georgia’s Center of Innovation for Aerospace), and changes

were made where necessary. During the vetting process, it became apparent that many

companies were classified under the wrong code. Every attempt was made to capture all

aerospace–related employment as defined by the NAICS codes listed on page 10. We

recognize that there may be many supporting companies that are not included in this

study.

The third step was to use the I/O model to estimate total impacts, which were divided

into three components. The first was the direct impacts (the value of resources brought

into the state); the second was indirect impacts (impacts from recirculation of resources

resulting from aerospace industry purchases from other industries); and the third was

induced impacts, resulting from activities in the household sector. The total impact

was the sum of direct, indirect, and induced impacts.


Table 2-1 provides estimates of the impacts of aerospace industry sectors contained in the

industry’s definition. Georgia’s aerospace industry employed 98,991 workers in 2015,

who earned nearly $10 billion in wages and salaries and generated an economic

output of $38.9 billion. The direct employment included civilian employment at Robins

AFB, Moody AFB and Dobbins ARB, which in 2015 accounted for 15 percent of Georgia’s

direct employment in aerospace industry.

While a large share of the impacts is attributed to direct employment, the total economic

impact (direct, indirect and induced) of aerospace industry is significant. The ongoing

operations of aerospace generated ripple impacts throughout the state supporting an

additional 169,241 indirect and induced jobs with earnings of $8.4 billion and

economic output of $24.9 billion.

Overall, wage rates of aerospace employees were higher than Georgia’s average wage rates

of all industries. In 2015, the annual average wage of aerospace industry workers,

excluding benefits, was $72,639 or 47 percent higher than the state’s overall

average wage rate of $49,551. The average wage rate, including benefits, of aerospace

workers in Georgia was $100,887.

The employment multiplier of the aerospace industry was Georgia was 2.71 and the income

multiplier was 1.84. These multipliers were higher than state’s average multiplier of all

sectors due to the industry’s high level of output and high wage rates.

Other Impacts not captured in this study

Aerospace industry generates additional impacts that are not captured in this

study. Single Proprietor businesses are not required to report employee totals, and

therefore have not been included in this analysis. There are a number of these

types of employers in the aerospace industry in Georgia, particularly in the

emerging sector of UAS. Additionally, the small airports have a significant impact

on the success of local economies and businesses, and that impact has not been

assessed as part of this report.

Table 2-1: Georgia’s Aerospace Industry Economic Activity: 2015


Employment 98,991 71,277 97,964 268,232

Wages &

Salaries $9,986,897,729 $4,184,769,135 $4,212,834,918 $18,384,501,782

Output $38,909,655,978 $11,406,271,664 $13,470,173,137 $63,786,100,779


Findings of 2011, 2013 and 2015 Studies

The Georgia Center of Innovation – Aerospace engaged Georgia Tech to conduct the

economic impact of Aerospace industry in Georgia in 2011. The economic impact study was

updated using 2013 data. The latest update is based on 2015 industry data. Figures 2-1

through 2-3 show a summary of the studies’ findings. It is important to note that aerospace

industry definitions (sectors included) vary in each study. Furthermore, revisions of NAICS

code definitions have an impact on the direct effect numbers. Therefore, caution should be

exercised in comparing the results of the three studies.

Aerospace direct

employment

increased by

10,632 or 12

percent in 2015

compared to

employment in

2013. The

increase in direct

employment

resulted in total

impact

increasing by 22

percent.

As shown in

Figure 2-2,

wages and

salaries4 of

direct

employment

increased to

nearly $10

billion in

2015.

This is an

increase of

$826 million,

or 9 percent from 2013 rates. The wages and salaries of total jobs also grew by $2.8 billion

or 18 percent. This is contrary to the slight decline of total wages and salaries from 2011 to

2013.

4 Wages and salaries presented in Figure 2-2 are not adjusted for inflation

88,873

47,874

105,416

242,163

88,359

52,776

78,043

219,178

98,991

71,277

97,964

268,232

-20,000

30,000

80,000

130,000

180,000

230,000

280,000

Direct Effect Indirect Effect Induced Effect Total Effect

Figure 2-1. Aerospace Industry Employment in Georgia2011; 2013; 2015

2011 Employment 2013 Employment 2015 Employment

$8.28

$2.61

$4.82

$15.71

$9.16

$2.97

$3.44

$15.57

$9.99

$4.18

$4.21

$18.38

$0 $5 $10 $15 $20

Direct Effect

Indirect Effect

Induced Effect

Total Effect

Billions

Figure 2-2. Aerospace Industry Wages & Salaries in Georgia2011; 2013; 2015

2011 Wages & Salaries 2013 Wages & Salaries 2015 Wages & Salaries


Direct

output5 of

aerospace

industry

increased by

nearly $6.5

billion, an

increase of 20

percent, from

2013 to 2015.

Total output

also

increased at a

robust rate of

25 percent.

5 Output figures shown in Figure 2-3 are not adjusted for inflation.

$30.42

$6.82

$13.47

$50.71

$32.45

$8.16

$10.26

$50.86

$38.91

$11.41

$13.47

$63.79

$0.00 $15.00 $30.00 $45.00 $60.00 $75.00

Direct Effect

Indirect Effect

Induced Effect

Total Effect

Billions

Table 2-3. Aerospace Industry Output in Georgia2011; 2013; 2015

2011 Output 2013 Output 2015 Output


SECTION 3

Fiscal Impact Analysis

This analysis also includes a fiscal assessment of how aerospace affects state tax revenues.

The fiscal impact analysis was calculated by estimating the revenues associated with the

aerospace industry’s total economic activity and subtracting the costs associated with

providing state services to Georgia’s households and companies associated with that activity.

Revenues included individual and corporate income taxes, sales and use taxes, highway

taxes, fees, and miscellaneous revenues. Costs included education; public health, safety, and

welfare; highways; administration; and miscellaneous. Table 3-1 provides the fiscal impact

estimates based on total impacts. The aerospace industry generated nearly $2 billion

in revenues for the state budget in calendar year 2015, which represents nearly

10% of the total state budget for its 2015 Fiscal Year6. When the costs of providing

services to all employees were deducted from these revenues, the net contribution of

aerospace industry to the state revenues in 2015 was nearly $1.2 billion.

Section 4 Aerospace Industry’s Contribution to

Georgia’s GDP

Aerospace industry is an important

driver of the state’s economic activity.

It creates and supports high-paying

jobs for Georgia’s citizens. In 2015,

aerospace supported 268,232 jobs

or 6.5 percent of the state’ total

employment7, and it contributed

$29.3 billion to the state’s GDP or

6 percent.

6 Source: GA 2015 Department of Revenue Annual Report-

https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2015_Statistical_Report.pdf


Table 3-1: Aerospace Fiscal Impact Analysis: 2015

Annual State Government Revenues $1,951,040,627

Annual State Government Costs $796,665,601

Net Annual Revenues $1,154,375,026

Aerospace Industry

6%

Figure 4-1: Contribution of Aerospace Industry to the State of Georgia's GDP (2015)

https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2015_Statistical_Report.pdf


SECTION 5

Location of Aerospace Firms

Georgia‘s diverse aerospace industry includes a range of firms that service and repair

aircraft, provide air transportation, and operate flight schools.

The following map

shows the location of

aerospace firms in

Georgia. Firms were

geocoded and mapped

based on their physical

address. Incomplete

addresses were either

not displayed on the

map or mapped based on

the address information

available – e.g., P.O. Box

or zip code maps to the

center of the 5-digit zip;

city name only maps to

the center of the

city. Note that there is

widespread activity

throughout the state,

with high-activity

clusters surrounding the

Atlanta Regional

Commission, Middle

Georgia, River Valley

and Coastal Regions.

SECTION 6

Special Interest Aerospace Regions

As shown in Figure 5-1, the majority of aerospace activity is centered in four economic

development regions as defined by the state. This section shows the economic impact of this

activity in each of the four selected regions:

Region 3 – Atlanta Regional Commission

Region 6 – Middle Georgia

Region 8 – River Valley

Region 12 – Coastal

Figure 5-1: Georgia Aerospace Firms by County: 2015


i. Atlanta Regional Commission- Region 3

The Atlanta Regional Commission (ARC) is the 10-county area of Cherokee, Clayton, Cobb,

DeKalb, Douglas, Fayette, Fulton, Gwinnett, Henry and Rockdale counties, including

the city of Atlanta. The region is home to Lockheed Martin Aeronautics, the Hartsfield-

Jackson Atlanta International Airport, the Dobbins Air Reserve Base and a number of

other companies therefore, it is no surprise the majority of aerospace activity occurs within

the ARC. The impact that stemmed from these activities in the region accounts for more

than 50 percent of the industry’s overall economic impact in the state of Georgia. There

were 56,757 jobs associated directly with aerospace industry in 2015. These jobs generated

$5.8 billion in direct wages and salaries and $19 billion in output. Using a regional

economic model, it is estimated that aerospace activities created and supported 145,883

total jobs with earnings of nearly $10.7 billion, and output of nearly $32.5 billion.

Table 6-1: Economic Impact of Aerospace Related Activities in the Atlanta Regional

Commission (Region 3) in 2015


Employment 56,757 39,306 49,820 145,883

Wages &

Salaries $5,831,753,528 $2,409,546,511 $2,429,909,750 $10,671,209,789

Output $19,008,759,938 $6,198,540,858 $7,252,158,196 $32,459,458,992


ii. Middle Georgia- Region 6

The Middle Georgia Region is comprised of Putnam, Monroe, Jones, Baldwin, Crawford,

Bibb, Twiggs, Wilkinson, Peach, Houston and Pulaski Counties. It also home to the Robins

Air Force Base8, the region’s largest employer. Aerospace companies in the region employed

10,065 people in addition to 13,600 civilians employed at the base, totaling 23,665

aerospace jobs in year 2015. These employees earned $2.3 billion in wages and salaries and

the companies’ activities generated nearly $8.5 billion in direct output during the year. The

total economic impact of aerospace activities in the region 48,928 jobs, wages and salaries

of $3.2 billion and output of nearly $11.6 billion. See Table 6.2 for a breakdown of the

region’s economic impact.

Table 6-2: Economic Impact of Aerospace Related Activities in Middle Georgia

Regional Commission (Region 6) in 2015


Employment 23,665 8,578 16,686 48,928

Wages

&

Salaries

$2,304,309,079 $375,756,838 $553,006,096 $3,233,072,013

Output $8,464,205,125 $1,161,633,872 $1,949,553,363 $11,575,392,360

8 Military jobs are not included in this study.

http://www.countymapsofgeorgia.com/wilkinson_county.shtml

http://www.countymapsofgeorgia.com/peach_county.shtml

http://www.countymapsofgeorgia.com/houston_county.shtml

http://www.countymapsofgeorgia.com/pulaski_county.shtml


iii. River Valley Region- Region 8

The River Valley Region includes Chattahoochee, Clay, Crisp, Dooly, Harris, Macon,

Marion, Muscogee, Quitman, Randolph, Schley, Stewart, Sumter, Talbot, Taylor, and

Webster Counties. In 2015, there were 899 direct jobs with wages and salaries of $63.5

million related to aerospace activity in the region. Direct output was $426.9 million. The

overall industry economic impact in the region totals to 1,724 jobs, $98.3 million in earnings

and $537.7 million in output.

Table 6-3: Economic Impact of Aerospace Related Activities in River Valley

Regional Commission (Region 8) in 2015


Employment 899 473 352 1,724

Wages &

Salaries $63,455,515 $22,880,339 $11,932,720 $98,268,574

Output $426,849,826 $69,108,510 $41,725,310 $537,683,646


iv. Coastal Region- Region 12

The Coastal regions encompasses 10 counties: Bryan, Bulloch, Camden, Chatham,

Effingham, Glynn, Liberty, Long, McIntosh and Screven. This region is the state’s third

largest in terms of aerospace activity. There were 12,166 direct jobs connected to aerospace

activity in the region in 2015 that injected $1.4 billion of direct wage and salaries into the

region’s economy. Direct output was $9 billion. Individual and business spending supported

additional regional economic activity bringing the total economic impact to 28,367 jobs, $2.1

billion in wages and salaries and $11.2 billion in output.

Table 6-4: Economic Impact of Aerospace Related Activities in the Coastal Regional

Commission (Region 12) in 2015


Employment 12,166 6,655 9,545 28,367

Wages &

Salaries $1,408,550,648 $321,339,591 $339,192,868 $2,069,083,107

Output $9,042,738,736 $1,017,393,995 $1,143,849,094 $11,203,981,825


SECTION 7

Unmanned Aircraft Systems (UAS)

Companies

Unmanned aircraft systems (UAS)9 have been used for decades evolving from being used for

basic operations to currently being used in a number of applications across many

industries. Given the growing use of UAS in the commercial and civil market, this study

quantifies the economic impact of this sector in the state of Georgia.

The Georgia Center of Innovation for Aerospace researched and identified 55 UAS

companies currently operating in the state of Georgia. However, we were able to get

employment data for only 12 companies; therefore, the impact incudes only these 12

companies.

Using data provided by the Georgia Department of Labor,10 it was determined that these

companies employed 630 people in year 2015 who earned $44 million in wages and salaries

and generated nearly $130 million in economic activity. The spending by these companies

and their employees generated additional activity in other sectors of the state’s economy.

Overall, UAS companies in 2015 created and supported 1,330 jobs with wages and salaries

of $78 million and generated nearly $233 million of economic activity.

Table 7-1: Economic Impact11 of Unmanned Space Systems Companies in Georgia:

2015


Employment 630 285 415 1,330

Wages &

Salaries $44,057,919 $16,135,058 $17,858,485 $78,051,462

Output $129,810,685 $45,616,544 $57,098,990 $232,526,219

9 Definition of UAS: An unmanned aircraft system (UAS), sometimes called a drone, is an aircraft without a

human pilot onboard – instead, the UAS is controlled from an operator on the ground https://www.faa.gov/uas/ 10 Source: Georgia Department of Labor, ES202 data (Firm level data) 11 The economic impact was calculated using companies’ self-reporting employment and NAICS code data.

https://www.faa.gov/uas/


SECTION 8

Space Companies

An increasing number of companies in Georgia are actively pursuing activities in the space

industry. This study shows the economic impact of the growing space sector. The Center of

Innovation for Aerospace has determined that there were 12 companies with some activities

in the space sector in 2015. These companies employed 915 employees that earned $122

million in wages and salaries and $333 million in economic activity. Further spending by

space companies and their employees resulted in supporting an additional 1,548 indirect

and induced jobs with wages of $74.3 million that resulted in output of $220.7 million.

Space companies are an important part of the overall aerospace industry. An increase in

commercial space opportunities has resulted in growth of the space companies whose

operations have generated an economic impact in the state of Georgia. As Table 8-1 shows,

space companies supported 2,463 total jobs that generated $196.2 million in wages and

salaries and $555.8 million in output

Table 8-1: Economic Impact of Space Companies in Georgia: 2015


Employment 915 503 1,045 2,463

Wages &

Salaries $121,859,842 $29,362,220 $44,944,721 $196,166,783

Output $333,076,945 $79,006,681 $143,706,628 $555,790,254


APPENDIX 1

Economic Impact by Region

While the majority of aerospace related activities are concentrated in a five regions, the

industry has presence in all twelve regions in the state of Georgia. Table A.1 shows a

breakdown of the economic impact of aerospace industry by region. Note that Wages and

Salaries and Output are slightly lower (less than one percent) than figures shown in Table

2-1 due to rounding.

Table A.1-1. Economic Impact of Aerospace Industry by Regions

Employment Wages and

Salaries Output

Atlanta Regional

Commission 56,757 $5,831,753,528 $19,008,759,938

Middle GA 23,665 $2,304,309,079 $8,464,205,125

Coastal 12,166 $1,408,550,648 $9,042,738,736

Northwest GA 1,214 $74,423,464 $346,513,190

South GA 1,160 $79,127,471 $351,409,404

River Valley 899 $63,455,515 $426,849,826

Southwest GA 828 $38,998,953 $259,382,893

Three Rivers 670 $42,181,287 $201,731,703

Northeast GA 507 $30,347,411 $127,521,273

GA Mountains 403 $23,713,550 $80,792,765

Heart of Georgia Altamaha 401 $31,541,898 $118,401,036

Central Savannah 321 $22,807,540 $116,222,995

TOTAL 98,991 $9,951,210,344 $38,544,528,884

Figures A-1.1 through A-1.3 show each region’s output, employment, and wages and

salaries.


Figure A-1.1: Aerospace Employment by Region: 2015


Figure A-1.2: Aerospace Industry Wages and Salaries by Region: 2015


See Appendix 2 for a definition of Output.

Figure A-1.3: Aerospace Industry Output by Region: 2015


APPENDIX 2

Methodology, Definitions and

References

METHODOLOGY AND DEFINITIONS

The economic impact of the aerospace industry was measured using IMPLAN, an economic

impact assessment model customized to reflect Georgia’s economy. The model estimates

the multiplier (indirect and induced) effects of direct economic activity for each sector of the

aerospace industry.

Output: Economic output is defined as the value of a company’s or industry’s

production. Simply, output is total sales revenue minus its cost of goods sold.

Wages and Salaries: Wages and salaries are defined as income paid by employers.

Direct Impacts: Direct impact measures employment, wages and salaries, and

expenditures of goods and services attributable to aerospace industry.

Indirect Impacts: Indirect impact results from the purchase of goods and services by

suppliers to the aerospace industry.

Induced Impact: Induced impact results from the expenditures of aerospace employee

wages and salaries.

Total impact: Total Impact is generally referred to as the “multiplier effect.” This effect

occurs whenever dollars are brought into a region’s economy and recirculated before exiting

or “leaking out.”

REFERENCES

Bureau of Economic Analysis Input-Output Sectors as contained in “IMPLAN Pro: Data

Guide,” Minnesota IMPLAN Group Inc., Stillwater, MN, 2015.

Georgia Department of Labor, ES202 Wage and Employment Data: 2015.

North American Industrial Classification System (NAICS),

http://www.census.gov/epcd/www/naicstab.htm

http://www.census.gov/epcd/www/naicstab.htm

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