Only a half dozen years after the Great Recession, the auto industry is experiencing a strong resurgence in payrolls with more than 7.25 million private sector jobs in the U.S. economy, according to industry analysis compiled by the Center for Automotive Research (CAR).
Of that total, Arkansas’ expanding automotive sector contributed more than 62,000 jobs, or 4.8% of Arkansas’ 1.3 million person labor pool in 2013, the report shows. That total represents 0.9% of the 7 million-plus workers in the U.S. auto industry, which generated $500 billion in payroll and another $205 billion in tax revenues.
At the same time, auto-related taxes and fees generated $1.07 billion to the state revenue coffers in 2013, totaling 12% of the yearly totals from $6.43 billion in new car sales, the CAR report shows. Altogether, there were 68 supplier companies, 1997 dealerships and 4,180 aftermarket, repair or auto service facilities across the state, which has a total of 2.4 million registered vehicles.
The information in CAR’s 57-page 2105 jobs report highlights the economic contributions of the auto industry in all 50 states. The report was commissioned by the Alliance of Automobile Manufacturers (AAM), which represent 12 of the nation’s largest automakers. The group includes BMW Group, Fiat Chrysler, Ford Motor Co., General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Cars North America.
To view AAM’s Arkansas fact sheet, click here.
Arkansas business leaders are pending their hopes that more auto jobs could be coming to the Natural State. Last month, state lawmakers approved $87 million in bond financing to entice the Department of Defense to award a contract to Lockheed Martin in Camden. The superproject is tied to a military vehicle, the Joint Light Tactical Vehicle (JLTV), that could produce 600 new jobs and 655 indirect jobs.
Overall, the CAR report shows that 14 automotive companies currently have numerous facilities in the U.S., with some companies supporting fully integrated operations in the country including research, development, design, engineering, headquarters, and manufacturing operations, while others have a much smaller footprint.
Beyond the number of jobs created, the industry contributes substantially to federal, state and local tax revenues, providing more than $200 billion to those governments.
These figures are likely to rise as well. CAR’s U.S. automotive employment forecast projects hiring will increase by approximately 10.8%, with a compound average growth rate of 2.1% from 2013 to 2018. U.S. production is forecast to continue expanding, growing at a compound average growth rate of 2.4%, resulting in a projected rise of 12.6% in production from 2013 to 2018. CAR’s econometric analysis also suggests auto sales over the next several years will continue to increase, from 15.6 million units in 2013 to 17.6 million units in 2018.
Other highlights of the report include:
· Direct Auto Employment: America’s automobile industry is one of the largest industries in the country. The industry directly employs over 1.5 million people engaged in designing, engineering, manufacturing and supplying parts and components to assemble, sell and service new motor vehicles.
· Major Customer of Goods and Services: America’s automakers are among the largest purchasers of aluminum, copper, iron, lead, plastics, rubber, textiles, vinyl, steel and computer chips.
· Jobs Dependent on Autos: When jobs from other sectors that are dependent on the industry are included, the auto industry is responsible for 7.25 million jobs nationwide, or about 3.8% of private-sector employment.
· Compensation: The contribution of automotive manufacturing to compensation in the private sector is estimated at more than $500 billion each year.
· Tax Revenues: People in auto-related jobs collectively generate more than $205 billion annually in tax revenues.
· GDP: Historically, the auto industry has contributed from 3 to 3.5% of America’s total gross domestic product.
· R&D: The auto industry invests billions every year in research and development, among the highest of any industry. However, unlike many other industries, only a small portion of R&D – just 1% – is funded through the federal government.