Aerospace Sitting Pretty as ‘Crown Jewel’ Industry

Aerospace is what is known as a ‘crown jewel’ industry: it offers high paying jobs, including ones in manufacturing, through both government and private sectors, and it is constantly seeing breakthroughs thanks to advancements in technology. Even a recent slowdown in production can be explained as the natural result of a previous production boom. States are currently trying to get their piece of the pie, and it’s easy to understand why once you understand the current state of the industry.

When considering why aerospace is such a coveted prize for states looking to bring in jobs, consider how it stacks up against other manufacturing industries post-Great Recession: manufacturing jobs in the U.S.—which were already seeing a decline before the economy crashed—shrank 22% between 2002 and 2012, save for the aerospace sector, which saw a 7% growth during that same period. Military sales during that time offset fiscal austerity measures imposed by the government, leading to a 41% industry growth overall.

There has been some slowdown of late, although any worries about a collapse due to a cancellation of plane orders by the likes of Boeing and Airbus are severely overblown. This slowdown, and the resultant order cancellations, are due to a backlog caused by the sheer volume of new orders that have come in during the last several years. That, combined with new, more energy efficient models on the horizon, have caused orders to stop, but they are expected to pick up again soon. Boeing, for example, has projected a demand for 35,000 new planes by 2030.

What is somewhat ironic is that the ‘bad news’ of this production slowdown in the private sector is offset by job growth in the defense sector of aerospace, the first in five years. An overall decline in defense since 2010 had been offset by parallel growth in private sector. In terms of jobs, aerospace and defense had seen a loss of 18% during that time, due to a slowdown of military engagement in the Middle East. This year, however, the U.S. military market rebounded, and as a result added 39,443 aerospace and defense jobs, leading to a 3.2% increase.

Innovation in the private sector also has everyone in the aerospace industry excited. High-profile companies like Tesla have helped make commercial space flight a real possibility in our lifetime, and states are doing all they can to get in on the production end while the getting is good. So far, Texas is leading the way. But other states, such as Hawaii, are taking steps to attract the commercial space travel industry, such as developing lunar base prototypes.

Meanwhile, other states are doing all that they can to attract or hold onto established aerospace manufacturing. The South is currently seeing a huge boom in new aerospace manufacturing jobs, with companies locating many of their new facilities throughout the region (Boeing in South Carolina; Gulfstream Aerospace Corp. in Georgia; Airbus in Alabama; GE Aviation in North Carolina). Southern states are especially attractive to the giants of the industry thanks to their low taxes and costs, high incentive offers, and the curtailing of their unions’ collective bargaining rights.

If southern states are the winners of the current trends in aerospace manufacturing, previous hubs such as California are doing what they can to keep from becoming the losers. Although the aerospace industry accounts for more business in California than either entertainment or agriculture, experts in the state warn that they could see a large exit to states with lower taxes and less regulation. On top of that, California is not investing in STEM programs as much as it could be, while other states are. Aerospace is an advanced industry, meaning many of the jobs in it are high-skilled ones. Places such as California, that used to have the market cornered on that end, are in danger of falling behind other states, which are currently investing more in research and development.

Aerospace is a constantly changing industry; one with enough different sectors that it doesn’t seem quite right to talk about it as a whole. The one area where that is appropriate is in acknowledging just how desirable every part of the industry is for states looking to add jobs and become industry hubs. The focus on regional growth means that aerospace, for whatever trends and changes it goes through, is going to remain a ‘crown jewel’ industry for a long time to come.