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Study: Auto parts industry makes up 2.3 percent of U.S. GDP

By: By Andrew Thurlow
AUTOMOTIVE NEWS

April 15, 2013

DETROIT -- The auto parts industry is the nation's biggest manufacturing employer, accounting for 2.3 percent of the U.S. gross domestic product, a new study says.

The study by the Motor & Equipment Manufacturers Association found that the industry directly employs more than 734,000 workers in all 50 states, while contributing nearly $355 billion to the GDP.

The study outlines the size of the U.S. auto parts industry, and details the impact of three segments: suppliers of light-vehicle parts to automakers, suppliers of parts for the light-vehicle aftermarket and suppliers of parts for heavy-duty vehicles.

The study, conducted in association with research firm IHS Automotive, relied on Bureau of Labor Statistics analysis and proprietary IHS forecasts that measure spinoff impacts and indirect employment.

Direct employees are those involved in making auto parts. Indirect employees include those who supply parts-making factories, but with services or materials that don't go into the vehicle parts, such as janitorial services or machine tools.

Michael Robinet, managing director at IHS Automotive, said for every direct job in the auto parts industry, another five jobs are created.

First, direct manufacturing jobs lead to indirect ones. The study said that the 734,000 direct employment jobs in the U.S. auto parts industry generate an additional 1.27 million indirect U.S. jobs.

Next, the report said, "The combined 2 million direct and indirect employees create their own economic impact through their everyday purchases within their local economy." That includes restaurants and other businesses that the workers at the parts-making factories patronize.

So the total employment impact from the auto parts industry in the United States was 3.6 million workers in 2012.

Those 3.6 million total employees generated more than $220 billion in wages and income. This represents 2.6 percent of all U.S. wages and salaries paid in 2012.

Light-vehicle automakers' suppliers accounted for most of the industry's direct employment: 58 percent. Robinet said aftermarket parts manufacturing accounted for 19 percent, while employment in the heavy-duty sector made up 23 percent.