Instruments
Overview
Instruments include a wide variety of precision manufactured products, from navigational equipment, medical and scientific laboratory equipment, and cameras and lenses; to measuring and controlling devises, fluid meters and counting devises, and watches and clocks. This industry is often grouped within high technology, defined as those industries that (1) routinely utilize scientific and engineering capabilities; and (2) are associated with job creation. High technology encompasses an array of manufacturing and service industries including electronic and electrical equipment, aerospace, pharmaceutical drugs, instruments, communications, and software.
Precision is an adjective often associated with instruments, implying a high level of innovation in product development, a high level of customization (and rapid obsolescence), and high skilled labor in close proximity to industry’s research and development labs. Developing a new devise—whether a speedometer or a surgical instrument—requires specific details for assembly, manufacturing, testing and delivery processes. As much as 80 percent of the costs and processes are dictated by the product’s design. In recent years, precision instrument makers have extended the scope of their businesses to include maintenance and other after-sale services to forge closer manufacturer-customer ties.
Innovation in precision instruments is often spurred by sophisticated "lead users" at the top universities and research laboratories, and industrial firms. For Washington State instrument manufacturers, "lead users" include a unique combination of resources and companies, including Washington Technology Center (University of Washington), Spokane Intercollegiate Research and Technology Institute, Fred Hutchinson Cancer Research Center (Seattle), Battelle Pacific Northwest Laboratory (Richland), and the Boeing Company. In addition to these lead users, instrument manufacturers are major exporters In precision instruments, innovation often thrives in small firms with niche products. Given that the industry is driven by innovation and a concern for product reliability, instrument makers rarely produce in mass quantities.
Current Status
During the 1970s and 1980s, Washington instruments enjoyed explosive growth, with an average annual employment growth rate of 19 percent. Since 1989, instruments have faltered and by many measures the industry lost ground for much of the 1990s. However, in recent years, instruments have rebounded with substantial growth in employment.
As foreign markets opened up for instruments companies, so has foreign competition intensified at home and abroad. According to the most recent Washington State Input-Output Study, instrument manufacturers in Washington are dependent upon out-of-state markets. In 1987, exports by Washington instrument manufacturers to domestic and foreign customers amounted to 70 percent of their value of shipments.
Employment in Washington Instrument Industry, 1981-1998
Source: Washington Employment Security Department
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In 1998, Washington instrument manufacturers employed 14,700 workers. The instruments industry is dominated by measuring and controlling devises and medical instruments and supplies. More than four-fifths of the state’s total employment in instruments are in these two subsectors.
There are over 290 instruments manufacturing establishments in the state. The average instrument establishment employs 50 workers. Only twenty-seven percent of the industry’s workforce were employed in small businesses (i.e., establishments with fewer than 100 employees).
Number of Establishments in Washington Instruments, 1981-1998
Source: Washington Employment Security Department
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Establishment Size in Washington Instruments Industry, 1998
Source: Washington Employment Security Department
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Average covered wages for instruments’ workers was $55,477 in 1998; over thirty percent above the statewide manufacturing average of $42,247. Over two-fifths of the workers in the industry earn over $20 per hour. Instruments is part of that select group of industries (including software, water transportation, aircraft, paper products) with the highest concentration of $24 per hour jobs.
Table 1
Real Average Wages for Washington Covered Instruments 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 |
| Search & Navigation Equipment | ||||||||||
$33,335 |
$33,708 |
$35,434 |
$36,993 |
$42,308 |
$44,867 |
$45,183 |
$50,332 |
$49,541 |
$54,221 |
|
| Measuring & Controlling Devises | ||||||||||
$29,868 |
$33,625 |
$35,071 |
$37,315 |
$38,599 |
$40,751 |
$42,500 |
$46,591 |
$46,114 |
$51,167 |
|
| Medical Instruments & Supplies | ||||||||||
$34,288 |
$37,967 |
$38,992 |
$41,708 |
$41,160 |
$43,724 |
$46,239 |
$46,008 |
$49,784 |
$63,643 |
|
| Ophthalmic Goods | ||||||||||
$25,329 |
$25,237 |
$26,578 |
$32,022 |
$35,527 |
$21,883 |
$23,504 |
$25,347 |
$28,713 |
$33,103 |
|
| Photographic Equip. & Supplies | ||||||||||
$29,032 |
$32,758 |
$36,018 |
$34,320 |
$31,972 |
$37,922 |
$23,457 |
$22,447 |
$24,924 |
$24,917 |
|
| Watches, Clocks, & Parts | ||||||||||
$5,920 |
$10,524 |
$25,719 |
$33,081 |
$29,034 |
$28,937 |
$26,312 |
$30,877 |
$25,467 |
$22,821 |
|
| Total, Instruments | ||||||||||
$30,906 |
$34,222 |
$35,585 |
$38,032 |
$39,869 |
$42,474 |
$43,926 |
$46,067 |
$47,056 |
$55,477 |
|
| Manufacturing | ||||||||||
$38,352 |
$37,909 |
$38,024 |
$37,876 |
$37,338 |
$37,667 |
$38,018 |
$38,942 |
$40,954 |
$42,247 |
|
| Statewide nonfarm | ||||||||||
$28,783 |
$27,789 |
$27,313 |
$27,304 |
$27,167 |
$27,928 |
$28,575 |
$29,046 |
$31,504 |
$33,922 |
|
Average Hourly Wages for Washington Instruments Workers, 1997
Source: Washington Employment Security Department
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The labor force in the instruments sector is dominated by operatives and laborers and professional and technical workers. Common instruments occupations within the operatives and laborers group are assemblers, machinists, inspectors, and repairers. Engineers, engineering technicians, drafters, computer programmers, systems analysts, and technical writers are common occupations within the professional and technical occupational group. Clerical and managerial and administrative occupations are also important in instruments manufacturing.
Table 2
Occupational Profile of Instruments Workers in Washington, 1998
and 2008
Source: Employment Security Department
Estimated 1998 |
Projected 2008 |
|||
| Instruments, SIC 38 | Estimated Employment | Percent of Total Employment | Projected Employment | Percent of Total Employment |
| Managerial & Administrative | 1,722 |
12.0% |
1,745 |
12.2% |
| Professional, Paraprofessional & Technical | 3,563 |
24.9% |
3,934 |
27.5% |
| Sales & Related Occupations | 727 |
5.1% |
710 |
5.0% |
| Clerical & Administrative Support | 1,774 |
12.4% |
1,562 |
10.9% |
| Service Occupations | 66 |
0.5% |
51 |
0.4% |
| Production, Operating & Maintenance | 1,944 |
13.6% |
1,780 |
12.4% |
| Operators, Helpers & Laborers | 2,821 |
19.7% |
2,753 |
19.2% |
| Undefined Occupations | 1,710 |
11.9% |
1,786 |
12.5% |
| TOTAL | 14,327 |
100.0% |
14,321 |
100.0% |
Contribution of Instruments to the
Washington Economy
Compared to the nation, the relative importance of instruments to the Washington economy is low. The index of specialization for Washington instruments has generally declined since 1984 when it approached 1.0 (an index of 1.0 signals the same importance of an industry for Washington as for the U.S.). The most recent index of specialization registers a 0.55 for instruments.
Index of Specialization: Washington Instruments, 1977-1997
Source: U.S. Bureau of Economic Analysis, Gross State Product Series
For more detail of above graphic
Instrument manufacturers in Washington serve both local and global markets. In the recent study, Foreign Exports and the Washington State Economy; an estimated thirty percent of $1.94 billion of instruments production in 1995 was exported to foreign markets. In 1998, state-originated exports in instruments were valued at $773.4 million.
Outlook
The market for precision instrument makers has been saddled with meager growth for a number of years and most experts expect a modest 3 percent annual growth rate in sales during the remaining 1990s. Currently, there is excess capacity in the industry resulting in consolidation and reduction of plant facilities, particularly those concentrated on specific products serving particular markets. Since U.S. markets for medical and aviation instruments are maturing, companies are looking overseas for sales growth. Consequently, U.S. based companies are either opening foreign facilities to remain close to buyers or forming joint ventures to gain access to new customers and markets.
Washington instrument makers are also subject to industry-wide forces reshaping the precision instruments manufacturers. Recent robust growth in certain instrument segments, namely scientific and medical instruments and supplies, overall instrument manufacturing in Washington is translated into modest growth through the year 2020. Employment is projected to grow gradually between 2000 and 2020 to a high of 16,100 by the year 2020.
Washington Instruments Wage & Salary Employment Forecast, 2000-2020
Sources: Washington Office of Financial Management,
Washington Employment Security
Department
