© stevanovicigor dreamstime.com General | May 15, 2020
IPC: health of EMS industry germane to success of U.S. economy
IPC’s recently published report, The Economic Impacts of the U.S. Electronics Manufacturing Sector, confirms the robust role that electronics manufacturing plays in the U.S. economy, as well as the impacts of COVID-19 that manufacturers and suppliers are most concerned about.
The report cites the electronics manufacturing sector as directly contributing to more than 1.3 million jobs in America; and for every one job in the industry, three other U.S. jobs are indirectly supported, totaling approximately 5.3 million jobs supported directly and indirectly by the industry. This jobs total translates to 3.7% of U.S. GDP, or USD 700 billion annually. The report also states that 75% of “direct electronics manufacturing jobs” are spread among 16 states, with California and Texas at the top. The Golden State accounts for 275,000 direct electronics manufacturing jobs and almost USD 197 billion in direct output, or 3.4% of California’s GDP. IPC President and CEO John Mitchell said, “Electronics are at the heart of thousands of products and hundreds of industries in the U.S. More than most industries, we are vertically and horizontally integrated across many markets, and the health of our industry is key to the overall success of the U.S. economy.” In other key findings, the report states that the electronics manufacturing industry is responsible for more than USD 1 trillion dollars in the content of final sales, spread out among business investment and inventory change (USD 426.6 billion); personal consumption (USD 306.5 billion); exports (USD 223.9 billion); federal defense (USD 37.8 billion); and other government spending (USD 48.1 billion). Total labor income for electronics manufacturing employees average a little more than double the national average compensation, at approximately USD 127,000. Electronics manufacturing employees also edge out other types of manufacturing wages, which average approximately USD 83,000 per year. In addition California and Texas, those state with higher-than-average contributions to yearly U.S. GDP from electronics manufacturing include Oregon, Massachusetts, Minnesota, North Carolina, Arizona, Wisconsin, and Colorado. Withing the industry, the largest subsectors, ranked by output, are computer and peripheral equipment manufacturing, semiconductor and other electronic component manufacturing; and navigational, measuring, electromedical, and control instruments manufacturing, which combined make up over 73% of the total. The report also drilled down into the impacts of COVID-19 on the industry, with data compiled through its COVID-19 Survey of the Electronics Industry. Results of the survey cited among the most difficult challenges born from the global health pandemic are the ever evolving and also nebulous operating restrictions, supply chain fluctuations, changing demand patterns, and a workforce that already felt unsettled prior to the coronavirus outbreak. As of April, the most troublesome concern, noted by 50% of manufacturers and suppliers polled, was weaker demand. The next greatest concern, cited by 44% of those surveyed, was supply shortages, while just over a third said they are worried about workforce shortages. While many manufacturers issued temporary layoffs in March and April, a majority of respondents said they plan to bring furloughed workers back to factories by the end of June. One in five said laid off workers would not return. Almost 70% of manufacturers have applied for a Payroll Protection Program loan ease the downturn, with approximately 44% responding that they have received funds. Twenty-five percent are still waiting to receive funding. “To help drive recovery from the COVID-19 crisis, we call on Congress to do more and establish a [USD] 10 billion Electronics Manufacturing Initiative to enhance the security of the U.S. electronics value chain,” Mitchell said. “By leveraging public-private partnerships, we can grow domestic capacity, research and development capabilities and bridge the workforce to elevate employee training.”