Industrial Equipment
Overview
Industrial equipment or non-electric machinery is the largest manufacturing employer in the United States with nearly 2.2 million workers. The industry is a highly diverse manufacturing sector. Machinery manufacturers produce products, parts, and equipment for a broad array of industries in Washington and beyond. These products include engines and turbines; farm and garden machinery and equipment; construction and mining machinery; industrial trucks and other materials handling machinery; machine tools and tool dies; special industry machinery for woodworking, paper products, printing trades, and food products; pumps and compressors; industrial fans and blowers; packaging machinery; computer and office equipment; industrial refrigeration equipment, commercial laundry machines, and automatic vending machines; and carburetors, pistons, and valves.
Employment in Washington Industrial Machinery & Equipment,
1961-1998
Source: Washington Employment Security Department
For more detail of above graphic
Current Status
In 1998, industrial machinery manufacturers in Washington employed 25,400 workers, about 7 percent of the state’s manufacturing workforce. Between 1992 and 1997, industrial equipment was one of the fastest growing manufacturing sectors in the state. One-third of the industrial equipment’s total employment has been added since 1992, coincident with the recent economic expansion. Industrial equipment is a cyclical industry, which tends to generate disproportionate high employment or unemployment depending on whether the economy is in expansion or contraction.
Annual Employment Change in Washington Total Nonfarm,
Total
Manufacturing and Industrial Machinery & Equipment, 1962-1998
Source: Washington Employment Security Department
For more detail of above graphic
Industrial machinery manufacturing in the state are dominated by computer and office equipment, miscellaneous industrial machinery, and special industrial machinery, which together account for two-thirds of industrial machinery employment. Formerly the largest subsector, construction and mining machinery and equipment now accounts for about 13 percent of industrial machinery’s total employment. Of the various subsectors, computer and office equipment has been the stellar performer since 1981 with an average annual growth rate in employment of 10.3 percent.
Number of Establishments in Washington Industrial Machinery
& Equipment, 1981-1998
Source: Washington Employment Security Department
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Industrial machinery is largely composed of small shops that manufacture components, finished products and do custom machine work for industrial niches. Eight of the subsectors (engines and turbines; farm and garden machinery; construction and related machinery; metalworking machinery; special industry machinery; general industrial machinery; refrigeration and service machinery; and miscellaneous machinery) account for about 90 percent of the total 1,139 establishments in 1998, yet they average around 17 employees per establishment. By contrast, the computer and office equipment subsector averages 120 employees per establishment. Nearly 80 percent of all computer and office equipment workers are found in establishments with 250 or more employees.
Size of Establishments of Washington Industrial Machinery &
Equipment Industry, 1998
Source: Washington Employment Security Department
For more detail of above graphic
Average covered wages for industrial machinery workers was $39,535 in 1997, well above the statewide nonfarm average ($31,328) but slightly below the statewide manufacturing average ($40,726). Computer and office equipment employees were the highest paid industrial machinery workers in 1997, earning $49,231; 21 percent above the statewide manufacturing wage. Over two-fifths of the workers in the computer and office equipment subsector earns over $20 per hour, compared with the rest of the state industry where over half earn between $8 and $16 per hour.
Table 1
Real Average Wages for Washington Industrial Machinery &
Equipment Workers, 1981-1998 (1997 dollars)
Sources: Washington Employment Security Department,
U.S. Bureau of Economic Analysis
| Sector | 1981 |
1983 |
1985 |
1987 |
1989 |
1991 |
1993 |
1995 |
1997 |
1998 |
| Engines and Turbines | ||||||||||
|
$42,837 |
$39,653 |
$31,739 |
$31,823 |
$37,971 |
$41,012 |
$40,332 |
$47,031 |
$41,927 |
$46,179 |
| Farm and Garden Machinery | ||||||||||
|
$29,607 |
$27,470 |
$29,222 |
$31,046 |
$30,452 |
$28,776 |
$29,508 |
$31,451 |
$34,045 |
$34,680 |
| Construction & Related Mach. | ||||||||||
|
$41,624 |
$47,769 |
$41,364 |
$35,503 |
$34,929 |
$35,743 |
$35,207 |
$38,239 |
$38,284 |
$41,074 |
| Metalworking Machinery | ||||||||||
|
$36,118 |
$31,376 |
$31,974 |
$30,657 |
$29,695 |
$32,018 |
$31,520 |
$33,990 |
$34,421 |
$35,643 |
| Special Industry Machinery | ||||||||||
|
$36,416 |
$37,263 |
$37,272 |
$33,844 |
$34,189 |
$35,027 |
$35,921 |
$36,229 |
$37,552 |
$38,711 |
| General Industrial Machinery | ||||||||||
|
$38,608 |
$37,453 |
$34,709 |
$33,006 |
$36,011 |
$35,950 |
$38,327 |
$39,580 |
$40,682 |
$43,327 |
| Computer & Office Equipment | ||||||||||
|
$29,206 |
$29,670 |
$31,849 |
$33,747 |
$37,971 |
$40,742 |
$41,511 |
$43,630 |
$49,506 |
$61,088 |
| Refrigeration & Service Mach. | ||||||||||
|
$38,501 |
$36,275 |
$40,215 |
$36,839 |
$36,847 |
$32,845 |
$29,884 |
$29,887 |
$30,707 |
$30,474 |
| Industrial Machinery, NEC | ||||||||||
|
$35,639 |
$32,100 |
$28,645 |
$28,437 |
$28,521 |
$28,458 |
$27,721 |
$28,829 |
$30,845 |
$31,617 |
| Total, Industrial Mach. & Equip. | ||||||||||
|
$36,200 |
$36,077 |
$34,809 |
$32,720 |
$34,172 |
$35,465 |
$35,840 |
$37,019 |
$39,756 |
$43,916 |
| Total manufacturing | ||||||||||
|
$38,352 |
$37,909 |
$38,024 |
$37,876 |
$37,338 |
$37,667 |
$38,018 |
$38,942 |
$40,954 |
42246.96 |
| Total nonfarm | ||||||||||
|
$28,783 |
$27,789 |
$27,313 |
$27,304 |
$27,167 |
$27,928 |
$28,575 |
$29,046 |
$31,504 |
33921.6 |
Average Hourly Wages for Washington Industrial Machinery &
Equipment Workers, 1997
Source: Washington Employment Security Department
For more detail of above graphic
The labor force in the industrial machinery sector is dominated by operatives and laborers. Common industrial machinery occupations within this group are assemblers, machinists, sheet metal workers, welders and laborers. Professional and technical and clerical occupations are also important in industrial machinery. Although the majority of computer and office equipment workers are operatives and laborer grouping, a sizable share of the subsector’s employees are classified as professional and technical workers. This greater proportion of professional and technical helps to explain the difference in wages between computer and office equipment and the rest of industrial machinery.
Table 2
Occupational Profile of Industrial Machinery & Equipment
Workers in Washington, 1998 and 2008
Source: Washington Employment Security Department
Estimated 1998 |
Projected 2008 |
|||
| Industrial Equipment, SIC 35/357 |
Estimated Employment |
Percent of Total Employment |
Projected Employment |
Percent of Total Employment |
| Managerial & Administrative | 2,319 |
8.3% |
2,977 |
8.7% |
| Professional, Paraprofessional & Technical | 4,405 |
15.7% |
5,561 |
16.3% |
| Sales & Related Occupations | 688 |
2.5% |
848 |
2.5% |
| Clerical & Administrative Support | 3,235 |
11.5% |
3,630 |
10.6% |
| Service Occupations | 178 |
0.6% |
188 |
0.6% |
| Production, Operating & Maintenance | 5,040 |
18.0% |
6,238 |
18.2% |
| Operators, Helpers & Laborers | 9,516 |
34.0% |
11,701 |
34.2% |
| Undefined Occupations | 2,644 |
9.4% |
3,072 |
9.0% |
| TOTAL | 28,025 |
100.0% |
34,215 |
100.0% |
Contribution of Industrial Equipment
to the Washington Economy
Compared to the nation, the relative importance of industrial machinery to the Washington economy is low. The index of specialization for Washington fabricated metals has hovered around 0.6 since 1987 (an index of 1.0 signals the same importance of an industry for Washington as for the U.S.; an index greater than 1.0 implies specialization and that the sector exports a portion of its output). In contrast, the computer and office equipment subsector’s relative importance to the Washington economy is high and increasing. Since 1989, computer and office equipment’s index of specialization has remained above 1.0.
Index of Specialization: Washington Industrial Machinery and
Computer & Office Equipment, 1987-1996
Source: U.S. Bureau of the Census, Annual Survey of Manufacturers/
For more detail of above graphic
Computer and office equipment is producing an increasing share of industrial equipment’s total production. In 1987, establishments produced $522 million of computer and office equipment, thirty percent of the total value of production for the state’s industrial machinery industry. By 1996, computer and office equipment’s share of total value of production ($3.35 billion) for industrial machinery had increased to 43 percent.
Value of Production of Washington Industrial Machinery &
Equipment,
1987-1996
Source: U.S. Bureau of Economic Analysis
For more detail of above graphic
Although most industrial machinery manufacturers in Washington service local and regional markets, an increasing share of production is being exported to foreign customers. According to a recent study, Foreign Exports and the Washington State Economy; nearly a third of industrial machinery’s production in 1995 was exported to foreign markets. In 1998, state-originated exports of industrial machinery were valued at $1.5 billion.
Outlook
Industrial machinery has outperformed the state economy during the last quarter century. Employment in industrial machinery has risen at a robust 4.4 percent average annual pace since 1973, more than double the growth rate of total manufacturing employment. Domestic and foreign markets for computer hardware are expected to remain strong for the next twenty-five years. The need for businesses and governments, at all levels, to increase productivity requires the application of computer technology as an integral part of the daily work environment. Increased usage of computers in schools and homes are also expected for the next two decades. Other industrial machinery production keyed to farm, construction, forest products, and other heavy industry markets are also expected to fare well in the future. The result of this bright outlook is continued expansion in industrial machinery. However, growth in industrial production will not translate into substantial job gains. By the year 2020, industrial machinery manufacturers are forecast to employ 28,800 workers, an average annual growth rate of 0.6 percent for the years 2000 through 2020. Computer and office equipment is forecast to decline in both absolute and relative terms during the forecast period. By 2020, computer and office equipment is predicted to have about 1,100 fewer workers than in 2000; its share of total employment declining to 30 percent from 42 percent. Other subsectors in industrial machinery & equipment are expected to pick up the slack, with a combined average of 1.1 percent in employment growth between 2000 and 2020.
Washington Industrial Machinery & Equipment Wage &
Salary Employment Forecast, 2000-2020
Sources: Washington Office of Financial Management,
Washington Employment Security
Department
