The U.S. aluminum industry directly employs more than 155,000 workers and generates $65 billion in economic output in all 50 states and the District of Columbia, according to a recent study.
The data comes courtesy of research conducted by economic research firm John Dunham & Associates on behalf of the Aluminum Association. The study puts emphasis on remarkably strong figures it discovered to confirm the growing importance of the domestic aluminum industry to the U.S. economy.
According to the study, for each aluminum industry job, an additional 3.3 jobs are created elsewhere in the economy, for a total of 672,000 jobs.
“You see this type of effect in a lot of manufacturing, but it’s certainly true with aluminum,” Matt Meenan, Director of Communications at the Aluminum Association, tells Industry Today.
“When you have manufacturing jobs in a town, it’ll have a positive impact on the economy elsewhere in that same town,” he says. “We certainly have that impact within the aluminum market.”
Furthermore, the study explains that when supplier and induced impacts are taken into account, the aluminum industry has an economic footprint of more than $152 billion – nearly 1 percent of Gross Domestic Product (GDP).
“We’ve been seeing some significant growth in the demand for aluminum in the United States since the recession,” Meenan says. “We’ve seen around 30 percent growth in demand since 2009, and we’re getting back to the levels of demand we saw in the mid-2000s. You’re seeing that reflected in some of these numbers.”
Indeed, we are. Consider the following figures from the report:
- Workers directly employed by U.S. aluminum industry earned more than $12 billion in wages and benefits in 2013;
- Indirect employment by the industry creates another $29 billion in wages and benefits;
- When all employment supported by the industry is taken into account, these jobs generate nearly $16 billion in federal, state, and local taxes;
- These workers earn average compensation of more than $60,000, far exceeding the national average of $43,000.
“As an integral part of the U.S. manufacturing base and overall economy, the aluminum industry supports hundreds of thousands of high quality manufacturing jobs in communities of all sizes,” Layle “Kip” Smith, President and CEO of Noranda and Chairman of the Aluminum Association, says.
“Aluminum is a vital material for the modern era and a bellwether for domestic manufacturing,” Smith adds.
COMPARE AND CONTRAST
The Aluminum Association last released a similar economic impact study in 2010 based on 2009 data, Meenan says. That analysis, he says, reported that about 106,000 jobs were directly supported by the aluminum industry.
The new study, he says, used an improved methodology in order to more fully capture the industry’s footprint.
The new methodology is based on company specific microdata rather than aggregate data from the Bureau of the Census. Microdata captures the actual physical locations of all the firms in the different facets of the industry, whereas Census Data only captures the broad-based employment numbers, generally only from the largest firms.
The study was completed by economic research firm John Dunham & Associates and is based on data provided by Dun & Bradstreet, Inc., the federal government and the Aluminum Association. The analysis uses the Minnesota IMPLAN Model to quantify the economic impact of the aluminum industry on the overall U.S. economy.
For the purposes of the report, the aluminum industry is defined to include:
- Alumina refining;
- Primary aluminum processing;
- Secondary aluminum smelting and alloying;
- Manufacturing of aluminum sheet, plate, foil, extrusions, forgings, coatings, and powder;
- Aluminum foundries;
- Metals service centers;
The study measures the number of jobs in this industry, the wages paid to employees, total economic output, and federal and state business taxes generated, the association says.
The new results, consequently, show significant job growth in a number of key areas:
- A four times increase in secondary smelting, and alloying jobs (4,500 vs. 16,800);
- A 73 percent increase in sheet, plate, foil, and extruded products jobs (32,500 vs. 56,200);
- A 23 percent increase in foundries jobs (29,600 vs. 36,400 jobs).
Meenan says the industry is “really excited” about the continuing popularity of aluminum in both transportation – particularly automotive – and construction.
“Those are the two industries where we are seeing significant growth in the demand for aluminum,” he says, adding that aluminum continues to own lightweight bragging rights for automotive body structures, helping both consumers and auto manufacturers improve fuel efficiency and meet federal mandates.
“There has been about forty years of uninterrupted growth in terms of more aluminum being used in automobiles,” Meenan says.
And construction is up, he says, thanks largely to the economy slowing rebounding from the long-lasting effects of the Great Recession. Even better, he says about 95 percent of aluminum used in construction is later recycled.
Will aluminum continue to have the same economical impact in the years to come?
“We do not formally forecast, but I think if you look at past history and how things seeming to be trending, we feel like aluminum is very well positioned for the future,” Meenan says. “Aluminum is a durable metal, it’s a light-weight metal, and it’s a sustainable metal. We believe those characteristics will continue to have its advantages in the marketplace.”
About the Aluminum Association
The Aluminum Association, which is based in Arlington, Va., works globally to aggressively promote aluminum as the most sustainable and recyclable automotive, packaging and construction material in today’s market. The Association represents U.S. and foreign-based primary producers of aluminum, aluminum recyclers and producers of fabricated products, as well as industry suppliers. Member companies operate approximately 180 plants in the United States, with many conducting business worldwide.