Fabricated Metal

Fabricated Metals

Overview

Nearly 1.5 million people are employed in U.S. fabricated metals industry, producing everything from the tiniest nuts and bolts to the sharpest cutlery to the most sophisticated aerospace components. Metal fabricators have enjoyed expanding orders in recent years. The reasons underlying the recent expansion are as diverse as the industry itself. Although each of the various fabricated metals’ subsectors respond to differing conditions, much of the industry’s expansion can be attributed to overall growth in the domestic economy. Most industrial sectors have expanded, housing starts have improved, and consumer spending has increased during the current expansion—consequently fortunes for the fabricated metals industry have been bright.

A significant share of metal fabricators is found "where the people are," meaning population gives rise to significant demand for housing and public works. For instance, the fabricated structural metals (e.g., metal doors, window and door frames, gutters and downspouts, fences and posts, prefabricated metal buildings, and sheet metal) and the plumbing and heating equipment (e.g., plumbing fixtures, heating equipment) sectors are inextricably tied to the performance of the construction industry. Other sectors, like cutlery, hand tools and hardware, are tied to consumer expenditures; whereas component parts and services (e.g., plating, polishing and coating; screw machine parts; and metal forgings and stampings; and valves and pipe fittings) tend to be located close to the final manufacturers.

Current Status

In 1998, Washington’s fabricated metals industry employed 14,250 workers, roughly 4 percent of the state’s total manufacturing work force. About one-third of the fabricated metals’ total employment has been added since 1992, coincident with the recent economic expansion. Fabricated metals is a cyclical industry, which tends to generate disproportionate high employment or unemployment depending on whether the economy is in expansion or contraction.

Figure 1

Employment in Washington Fabricated Metals Industry, 1947-1998
Source: Washington Employment Security Department

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Figure 2

Annual Employment Change in Washington Total Nonfarm, Total Manufacturing and Fabricated Metals, 1971-1998
Source: Washington Employment Security Department

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Metal fabricators in the state are dominated by fabricated structural metal producers, which account for 44 percent of metal fabricators employment. The second largest subsector, metal services include various coatings, finishes, and engravings. The third and fourth largest subsectors are miscellaneous fabricated products (e.g., variety of finished and component parts including steel springs, valves, pipe and pipe fittings, foil and leaf, and fabricated wire products) and metal forgings and stampings. Together, these four subsectors make up four-fifths of all Washington metal fabricators.

Figure 3

Employment in Washington Fabricated Metals, by Subsector: 1981-1998
Source: Washington Employment Security Department

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There are over 620 fabricated metals establishments in the state. The average metal fabricator establishment employs 23 workers. Over fifty percent of the industry’s work force were employed in small businesses.

Figure 4

Number of Establishments in Washington Fabricated Metals, 1981-1998
Source: Washington Employment Security Department

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Figure 5

Size of Establishments of Washington Fabricated Metals, 1998
Source: Washington Employment Security Department

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Average covered wages for metal fabricators’ workers was $32,607 in 1998; twenty-two percent below the statewide manufacturing average. In contrast to the total nonfarm and manufacturing, fabricated metals workers’ average annual wages declined in real terms between 1981 and 1998. Nearly two-thirds of the workers in the industry earn between $6-$16 per hour.

Table 1

Real Average Wages for Washington Covered Fabricated Metals Workers, 1981-1998 (1998 dollars)
Sources: Washington Employment Security Department,
U.S. Bureau of Economic Analysis

Sector	1981	1983	1985	1987	1989	1991	1993	1995	1997	1998
Fabricated Structural Metal
	$39,437	$34,322	$30,717	$28,967	$29,398	$30,524	$31,171	$30,742	$31,120	$31,767
Metal Services nec
	$30,906	$28,023	$25,795	$25,969	$25,069	$24,989	$24,522	$24,555	$29,183	$30,307
Miscellaneous Fabricated Prod.
	$37,187	$34,201	$32,175	$31,787	$28,725	$29,437	$30,047	$31,398	$33,226	$33,526
Metal Forgings & Stampings
	$39,776	$30,404	$28,524	$29,928	$29,115	$28,574	$29,830	$29,486	$32,084	$32,859
Other Fabricated Metals
	$36,592	$36,659	$35,420	$32,607	$34,855	$34,800	$35,393	$35,062	$34,710	$36,356
Total, Fabricated Metals
	$38,061	$34,082	$31,344	$29,943	$29,880	$30,518	$31,010	$30,812	$31,849	$32,607
Total manufacturing
	$38,352	$37,909	$38,024	$37,876	$37,338	$37,667	$38,018	$38,942	$40,954	$42,247
Total nonfarm
	$28,783	$27,789	$27,313	$27,304	$27,167	$27,928	$28,575	$29,046	$31,504	$33,922

Figure 6

Average Hourly Wages for Washington Fabricated Metals Workers, 1997
Source: Washington Employment Security Department

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The labor force in the fabricated metals sector is dominated by operatives and laborers. Common metal fabricator occupations within this group are assemblers, machinists, sheet metal workers and fabricators, welders, and laborers. Managerial and administrative and clerical occupations are also important in fabricated metals.

Table 2

Occupational Profile of Fabricated Metals Workers in Washington,
1998 and 2008
Source: Washington Employment Security Department

	Estimated 1998		Projected 2008
Fabricated Metals, SIC 34	Estimated Employment	Percent of Total Employment	Projected Employment	Percent of Total Employment
Managerial & Administrative	1,159	8.0%	1,336	8.0%
Professional, Paraprofessional & Technical	779	5.4%	897	5.4%
Sales & Related Occupations	389	2.7%	442	2.7%
Clerical & Administrative Support	1,416	9.8%	1,533	9.2%
Service Occupations	72	0.5%	73	0.4%
Production, Operating & Maintenance	2,712	18.7%	2,993	18.0%
Operators, Helpers & Laborers	6,730	46.4%	8,010	48.2%
Undefined Occupations	1,237	8.5%	1,353	8.1%
TOTAL	14,494	100.0%	16,637	100.0%

Contribution of Fabricated Metals to the Washington Economy

Compared to the nation, the relative importance of fabricated metals to the Washington economy is low. The index of specialization for Washington fabricated metals has hovered around 0.4 since 1977; though more recent years have seen a jump to 0.5 (an index of 1.0 signals the same importance of an industry for Washington as for the U.S.).

Figure 7

Index of Specialization: Washington Fabricated Metals, 1977-1997
Source: U.S. Bureau of Economic Analysis, Gross State Product Series

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Most metal fabricator shops in Washington serve local and regional markets. Businesses in this sector compete within niches on the basis of price, production capability, and timely delivery. Selling to local and regional markets is confirmed by the recent study, Foreign Exports and the Washington State Economy; less than ten percent of $2.1 billion of fabricated metals production in 1995 was exported to foreign markets. In 1998, state-originated foreign exports in fabricated metals amounted to $235.5 million.

Outlook

According to the most recent long-term forecast by the Office of Financial Management and Employment Security Department, metal fabricators are expected to under-perform statewide manufacturing through the year 2020. For the first decade of the twenty-first century, average annual employment in fabricated metals is expected to grow 0.42 percent, compared with 0.56 percent growth rate for manufacturing.

Figure 8

Washington Fabricated Metals Wage & Salary Employment Forecast,
2000-2020
Sources: Washington Office of Financial Management,
Washington Employment Security Department

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