What factors do you think determine whether or not a particular state is attractive for manufacturing? I ask because I’m intrigued by the results of PwC’s 2015 Aerospace Manufacturing Attractiveness Rankings, which ranked states based on tax rates, industry size, operating cost and education. The study used a weighted average of variables such as costs, workforce and number of aerospace companies located in each state to determine rankings.
This year, again, Florida ranked first in the U.S. for aerospace and aviation manufacturing attractiveness, according to the report. Florida is home to more than 2,000 aerospace and aviation companies that employ more than 82,000 workers. The sector has an annual payroll impact of more than $5 billion in Florida.
The top 10 states, as ranked by PwC, are: Florida, Michigan, Ohio, Utah, Virginia, Georgia, New York, Texas, Missouri and North Carolina. While Michigan, Ohio, Texas, Georgia, and Missouri remained in the top 10 since last year’s ranking, Utah, Virginia, New York and North Carolina were added to the list.
I found it interesting to see how factors may offset each other. For example, New York had moderate rankings but was helped by its overall #1 rank in workforce education. Virginia was ranked #6 in taxes and #5 in education, which more than offset its higher operating costs. Then there’s Utah, which combined a strong industry rank with low taxes.
Interestingly, California fell off the top 10 list this year. Although it ranks #1 in industry employment and aerospace suppliers, and #4 in education, California’s overall rank was dragged down because it was #43 in industry growth and #46 in operating cost.
Washington State fell from the #3 rank to #12. Even though Washington was ranked #7 in industry rank and #10 in education, its operating cost and taxes dragged the state down. High operating and tax costs also caused Pennsylvania and Arizona to fall out of the top 10 ranks.
It’s important to point out that, as PwC notes, this ranking by no means suggests the “best places” for aerospace manufacturing, given that companies’ individual criteria for locating in a geographical area vary so widely. On the other hand, it does offer a view on the wide diversity of options to locate sites and/or R&D facilities—especially for suppliers which do not need to be based near OEMs.
One factor that does warrant emphasis is that for companies to thrive, they must nurture a workforce to satisfy backlog demand for aircraft and to meet demand for the next generation of more efficient, sustainable aircraft, PwC authors write. Growing and diversifying this workforce is fundamental to securing the competitiveness of U.S. commercial aviation manufacturing in a globalized market. Some companies have taken innovative steps to recruit, train and retain talent. For example, the PwC authors do point out that South Carolina has been working closely with Boeing, which recently located a 787 final assembly plant there, to create a state-sponsored training program and facility to keep supplying qualified, interested employees as the site grows.
“Effective talent recruitment strategies involve collaboration among private sector, government and educational institutions that target numerous talent issues including STEM education, relevant job skills training, and the recruitment of new talent needed to spark innovations that will produce the next generation of aircraft,” PwC authors write. “The industry should also take measures to lift its reputation and allure, as other industries, over the years, have pulled talent that might once have been drawn to aviation.”
Whether you are in the aerospace and aviation industry or not, what do you think of the state rankings? Are those top states where you and your supply chain have locations?