Electronics Manufacturing Supports More Than 5.3 Million U.S. Jobs and Almost 4% of U.S. GDP, Says IPC

Electronics manufacturing contributes powerfully to the U.S. economy, according to a new report released by IPC, the global electronics manufacturing industry association. The report finds the electronics manufacturing sector directly supports more than 1.3 million U.S. jobs. For every U.S. electronics manufacturing job, three other jobs are supported in the U.S. economy, contributing to a total of 5.3 million American jobs. Also, the industry indirectly and directly contributes $714 billion (3.7 percent) to U.S. GDP.

“Electronics are at the heart of thousands of products and hundreds of industries in the U.S.,” said John Mitchell, president and CEO of IPC. “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.”

The report also finds 16 states, led by California and Texas, account for about 75 percent of direct electronics manufacturing jobs in the United States. California alone has nearly 275,000 direct electronics manufacturing jobs and almost $197 billion in direct output, accounting for 3.4 percent of California’s GDP.
Other key findings from the report include:

• The electronics manufacturing industry is responsible for more than $1 trillion dollars in the content of final sales, spread across business investment and inventory change ($426.6 billion); personal consumption ($306.5 billion); exports ($223.9 billion); federal defense ($37.8 billion); and other government spending ($48.1 billion).
• Ten states have more than 100,000 workers each because of the electronics manufacturing sector, led by California and Texas.
• Electronics manufacturing employees average about $127,000 in total labor income, which is more than double the national average compensation of $60,820. Electronics manufacturing employees also earn more than the average manufacturing employee, who earns $83,000 a year.
• States with higher-than-average contributions to GDP from electronics manufacturing include Oregon, California, Massachusetts, Minnesota, North Carolina, Arizona, Texas, Wisconsin, and Colorado.
• The largest subsectors of electronics manufacturing, ranked by output, are computer and peripheral equipment manufacturing, semiconductor and other electronic component manufacturing; and navigational, measuring, electromedical, and control instruments manufacturing, which together make up over 73 percent of the total.

COVID-19 Impacts on the Industry

Regarding the biggest economic concern of the moment, the coronavirus epidemic is being felt by the U.S. Electronics manufacturing industry. The electronics manufacturing industry is facing a variety of challenges, including unclear and evolving operating restrictions, changing demand patterns, abnormalities in supply chains, and an unsettled workforce that was already stretched thin.

While manufacturers and suppliers report several concerns, they appear most concerned about weaker demand. In April, more than half of manufacturers said this would be their biggest concern in the weeks ahead, according to IPC’s COVID-19 Survey of the Electronics Industry. Some 44 percent reported they are most concerned about supply shortages, while just over a third said they are worried about worker shortages.

Also, as work dried up, many manufacturers issued temporary layoffs in March and April, and now a majority of respondents report they expect to bring furloughed workers back to factories by the end of June 2020. However, one in five said furloughed workers would not return.

Finally, nearly 70 percent of manufacturers have applied for a Payroll Protection Program loan to help cope through these challenging times. Of those who have applied, roughly 44 percent have received funding, while 25 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 $10 billion Electronics Manufacturing Initiative to enhance the security of the U.S. electronics value chain,” said Mitchell. “By leveraging public-private partnerships, we can grow domestic capacity, research and development capabilities and bridge the workforce to elevate employee training.”