Through 2019, the aerospace and defense industry showed phenomenal growth and a promising foray into a new decade. But when the COVID-19 pandemic disrupted air travel and supply chains early in 2020 (and with lasting effects), speculation grew as to how the industry would survive and when (or if) business would return per usual.
It’s no secret that A&D plays a vital role in U.S. innovation, the economy, and our national security. And while it may not emerge from the pandemic conditions unscathed, a new report from Aerospace Industries Association shows the true strength of A&D and offers hope that it can bounce back with ease.
Here are three key takeaways from the AIA’s Facts and Figures 2020 report:
1. Aerospace and Defense is the Heart of the U.S. Economy
2019 was a banner year for A&D, resulting in $908 billion in total industry sales revenue and $148 billion in exports. Collectively, the industry represents about 1.8% of the U.S. GDP and makes up roughly 1.4% of the country’s workforce. The size of its sales and workforce make it the beating heart of our economy. It supports the local communities in which its nearly 2.2. million employees live.
It’s also one of the oldest industries in the U.S., with a history dating back more than 100 years. Experts believe that it could take as much as 10 years for A&D to shake off the impacts of COVID, but are confident that bipartisan government assistance can help to mitigate the effects.
2. Economic Growth Makes Protecting the Workforce a Top Priority
A&D workers are highly skilled and earn an average of $102,000 per year. According to the report, the industry paid more than $226 billion in wages and benefits in 2019 alone, a 6.8% increase over the previous year. For comparison, the average salary is 46% higher than the national average for all workers.
Given the skilled nature of A&D work coupled with the higher salaries and deep roots in the economy, protecting the workforce as much as possible is a top priority to the industry as well as local and national governments. It’s estimated that COVID will result in more than 220,000 lost jobs under current projections if no further government assistance is offered.
3. Decreased Air Travel Creates a Ripple Effect
In April 2020, domestic air travel saw a 95% decrease year-over-year. In turn, this lower demand is estimated to decrease aircraft production by at least 50% this year, which may result in 220,000 jobs lost. It may take as much as five years for airline passenger demand to return to normal, but the industry as a whole may not fully recover until the next decade.
However, this isn’t slowing down companies from taking action, especially in safeguarding employees and keeping operations humming. From decontamination efforts to expanded benefits, companies are even more invested in taking care of their employees to maintain the workforce and build resilience from within.
For more A&D insights, read the full AIA Facts and Figures 2020 report here.