Boeing impact to be more than $6B a year, study says

The Boeing Co. will add $6.1 billion to South Carolina’s economy each year and tack on nearly $3 billion to state tax revenues over three decades, according to a study released this morning by a Columbia-based nonprofit.

Miley & Associates Inc. conducted the study for the Alliance for South Carolina’s Future, a Columbia-based organization for which the stated mission is to promote economic growth in South Carolina.

The study, led by economist Harry Miley, the chief economic adviser for former S.C. Gov. Carroll Campbell, found that Charleston would receive the greatest yearly benefit, with the manufacturing facility having a $5.9 billion annual impact on the region, including more than 15,000 jobs that will be created as a result of the company.

Jobs now, jobs later
The study assumes that Boeing will create 3,800 jobs at its final assembly and delivery facility, which was the number of jobs state economic incentives were based on. The company has not released the total number of jobs its operations will employ in the state. The impact also includes thousands of spinoff jobs in other sectors of the economy, the study said.

“These impacts will begin to occur immediately once the facility is operational and will continue for the entire life of the facility,” according to the study.

But some companies are already entering the state or have expanded because of increased work related to Boeing. In February, the Columbia Regional Business Report reported that one of Boeing’s suppliers, ACAS Landing Gear Services, was coming to Marion County. Leatherwood Electronics and Manufacturing in Charleston expanded its operations by 25,000 square feet since 2007 because of Boeing, as reported in the Charleston Regional Business Journal in March.

The construction phase of the project is expected to have a major short-term impact as well, with almost 9,900 direct and spinoff jobs and a $1.4 billion impact on the region, the study found.

Construction activity will generate an estimated $246 million in direct labor income and have a multiplied impact throughout the economy of more than $413 million.

Even now, nearly 1,000 construction workers are on site daily at Boeing’s new 787 final assembly and delivery facility in North Charleston, and the company announced earlier this month that it will be opening an interior fabrication plant nearby.

It’s not certain whether that facility will entail new construction, according to Boeing spokeswoman Candy Eslinger. But officials with BE&K/Turner Joint Venture, the design-build contractor on the final assembly plant, have expressed interest in the project.

Total impact
Alliance officials said their study was aimed at helping policymakers understand the total economic impact Boeing’s arrival will have in South Carolina.

“The Alliance for South Carolina’s Future commissioned this study to put the Boeing project in historical perspective,” said Ed McMullen, co-founder of the alliance. “We also wanted to quantify the effect Boeing will have on our state. By every measure, the effect is profound.”

The Alliance for South Carolina’s Future has scheduled a news conference for 3:30 p.m. today in Columbia to discuss the results of the study.

Other findings in the study include:
* The announced capital investment for Boeing, $1.025 billion, nearly equals all of the private capital investment made in South Carolina in 2003, $1.128 billion.
* Boeing’s capital investment per job, $268,816, more than doubles the statewide average in 2003 and is significantly higher than the average in South Carolina since then. The capital investment per job is a good indicator of whether a new facility will help support local governments.
* If Boeing’s investment in South Carolina grows at a similar rate as that of BMW over the next 17 years, the company would employ 9,500 people and have a $10 billion capital investment.
* South Carolina must compete for jobs and new investment with incentive packages, in part because the state’s property taxes on industrial property are too high. One study ranks South Carolina highest in the nation, putting the state at a significant disadvantage.

Boeing’s response
Boeing released a statement on the study this morning.

“Although Boeing didn’t commission the study or contribute to it, the Alliance did share their final work product with us recently,” the statement read. “And while we can’t speak to the methodology used in this particular study, we do feel that we have a significant impact on the State of South Carolina — with both our current and future operations.

“We feel we’re not just creating jobs in South Carolina; we’re creating careers for generations to come — and we’re creating an aerospace hub that has a long and prosperous future in the state.”

The only item on the alliance’s website is the Boeing study. Information about the alliance includes a listing of board members and officials: chairman Bill Stern, co-founder Bob McAlister, co-founder McMullen, Larry Wilson and John Russell.

According to records from the office of S.C. Secretary of State Mark Hammond, the organization was formed in April 2009, but it has undergone two name changes this year. It was first registered as S.C. Action for Jobs, according to records, and the name was changed to Conservative SC on Feb. 19. That name was changed a few days later, on Feb. 26, to Alliance for South Carolina’s Future.