Economic & Fiscal Impacts of Marana Aerospace Solutions on - - PowerPoint PPT Presentation

Elliott D. Pollack & Company

Presented by: Danny Court

Principal, Senior Economist Elliott D. Pollack & Company

Economic & Fiscal Impacts of Marana Aerospace Solutions on Pinal County

Elliott D. Pollack & Company

Think of an economy in two parts: Export

(Base Industries)

Domestic

(Local Industries)

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• Goods or services are sold outside the

local economy;

• Money is imported into the region;
• These monies circulate;
• Leakage eventually occurs;

The Effect of Base Industries on the Local Economy

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Flow of a Region’s Economy

Base Industries

Export-Related Business Services, Manufacturing, Tourism, Retirement, etc.

Local Market Industries

Retail, Construction, Local Business Services, Banks, Local Government

Spending by Base Industries

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• 1. Demand for their product is primarily

from outside the local market area. They are NOT just chasing $$$ already here. 2.They can produce almost anywhere. 3.They create demand for local goods & services.

“Base” Industry Facts

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Pinal County Targeted Industries:

• Transportation/Logistics
• Manufacturing
• Health Services
• Aerospace & Defense
• Natural & Renewable Resources
• Tourism

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Economic Impact

• n the Region
• Company adds jobs and pays a salary to its

employees.

• The company buys goods & services within the

region.

• Employees spend their salaries on goods and

services within the region.

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Economic Impact

• n the Region - Direct
• Creating jobs and paying a salary to its

employees.

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Economic Impact

• n the Region - Indirect
• Buying local goods & services

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• Employees & supplier employees spend

their salaries on items such as:

• Housing
• Automobiles (car dealerships)
• Clothing (retail stores)
• Food (grocery, restaurants)
• Services (plumber, health care, legal, etc.)
• Entertainment

Economic Impact

• n the Region - Induced

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• In turn, those retail and service employees

receive salaries.

• They spend money on local goods &

services.

Economic Impact

• n the Region – Cycle Continues

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In general, the higher the wage, the larger the multiplier.

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Average Annual Wages

• v. Multiplier Effects

Source: Implan 2016

Industry Average Annual Wage Job Multiplier

Base Industries

Inorganic chemical manufacturing $99,817 4.4 Semiconductor machinery manufacturing $151,536 4.7 Electronic computer manufacturing $130,443 4.5 Computer storage device manufacturing $128,723 5.4 Aircraft manufacturing $135,700 3.9 Custom computer programming services $91,981 2.8 Scientific research and development services $93,250 3.3

Local Industries

Retail stores $36,152 1.4 Real estate $23,279 1.8 Landscape services $32,156 1.3 Elementary and secondary schools $42,345 1.5 Full-service restaurants $25,786 1.3 Other personal services $36,095 1.3

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Marana Aerospace Solutions at Pinal Airpark

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Marana Aerospace Solutions is a “Base Sector” Industry

Brings money into the community from outside.

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ECONOMIC & FISCAL IMPACT

(a) Construction impacts (b) Operations impacts (c) Employee spending impacts

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Marana Aerospace Solutions Operations Impacts

Average Annual Impact

Direct Jobs (Including Contractors) 378 Total Jobs 590 Wages $30.3 million Economic Output $134.4 million Local Purchases (supplies, vehicles, utilities, rentals, etc.) $1.8 million Annual Fiscal Impact** $87,800 *2016 dollars **County revenues only

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Marana Aerospace Solutions Employment Impact

• 260 Direct Staff
• 118 Contractors (stay an average of 4 months)
• 600 Aircraft Overseers (stay an average of 2 weeks)
• 38 auditors (stay an average of 2 days)

 Report figures assume less than 5% of direct employees live within Pinal County and that no overnight stays or spending by temporary guests is yet captured by Pinal County.

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Visitor Spending Impacts

Average Annual Impact

Spending $3.5 million Jobs 52 Wages $189,000 Economic Output $644,000

Much of this spending is likely captured by Pima County, but represents an opportunity for Pinal County as additional assets are developed near the airpark.

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Aerospace Industry Outlook

 Boeing forecasts air traffic growth averaging

4.0% while Airbus forecasts passenger traffic growth of 4.5% annually over the 20 years from 2016 through 2035.

 This equates to demand of 33,100 to 39,600

aircraft over the next 20 years.

 Already, both companies are experiencing

record backlogs (Boeing – 5,795 aircraft & Airbus – 6,831 aircraft), equal to approximately 8 to 11 years of production for the aircraft makers.

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Aerospace Industry Outlook

 The Maintenance, Repair & Operations (MRO)

industry also has a healthy outlook.

 The forecast for large commercial and

regional jet MRO business is for growth at a compound annual rate of 4.1% over the next 10 years.

 Demand for MRO should mirror the growth in

airline fleets, with the highest rates of growth

• riginating from developing economies.

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Opportunities for Expansion

 Could soon need additional capacity

which would likely generate a $30 million capital investment.

 This would essentially double the size of

the company (756 direct jobs, 1,180 total jobs).

 Total economic impact of expanded

footprint would be $268.8 million annually.

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Marana Aerospace Solutions is a great Anchor Tenant for Pinal Airpark

 It is recommended that the County

explore opportunities to leverage Marana Aerospace’s presence to attract complimentary users and suppliers.