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Industrial truck industry contributes $25.7 billion to U.S. economy, report says
The industrial truck industry's total contribution to the U.S. economy in 2015 was an estimated $25.7 billion, while its "jobs multiplier"—the number of jobs supported elsewhere in the economy for each direct employee—is higher than that for many industries, according to a new Oxford Economics report titled "Lifting America: The Economic Impact of Industrial Truck Manufacturers, Distributors and Dealers."
The report, commissioned by the Industrial Truck Association (ITA), was released in Washington in mid-June. ITA represents original equipment manufacturers (OEMs) and suppliers of parts and accessories for lift trucks, pallet trucks, tow tractors, and automated guided vehicles. The Material Handling Equipment Distributors Association (MHEDA) also provided support for the project.
The study encompasses equipment manufacturing as well as support services such as sales, leasing, and rental operations; distribution and logistics; and training, maintenance, and repair services.
The industry has a large footprint. Annual sales of industrial trucks in the U.S. hit a record high of 225,534 units in 2015, the most recent year for which final data is available. The Bureau of Labor Statistics (BLS) estimates that over 540,000 industrial truck operators are currently employed in the U.S.
Researchers broke down industrial truck manufacturing's economic impact into three categories: "direct," "indirect," and "induced." The report quantifies each category in terms of gross value added (GVA) to gross domestic product (GDP), employment, wages, and taxes paid. GVA is a measure of output less intermediate consumption, defined as the value of goods and services consumed as production inputs, such as raw materials, power, and labor.
The report describes direct impact as operational activities that add value to U.S. GDP, including production, direct employment, wages, corporate profits, and taxes. Oxford Economics estimates that the industrial truck industry's direct impact activities accounted for $10.8 billion in 2015.
Indirect impact stems from the procurement of goods and services from other businesses within industrial truck manufacturing's supply chain. It includes employment and GDP contribution by the OEMs' own suppliers (for example, suppliers of parts and information technology support) as well as by companies within the supply chains of those suppliers. The report estimates suppliers' GDP contribution in 2015 at $7.3 billion.
Induced impact includes employees' spending in the broader consumer economy. Employees of manufacturers, dealers and distributors, and suppliers use their wages to pay for such necessities as food, health care, utilities, transportation, housing, and more. That estimated contribution to U.S. GDP in 2015 was $7.6 billion.
Direct, indirect, and induced economic activity supported by the industrial truck sector generated $3.3 billion in federal tax revenue and $2 billion in state and local taxes in 2015. The industry had the biggest economic impact in Illinois, Ohio, and Texas, according to the report.
The industrial truck industry has been a significant generator of jobs. According to the report, the average rate of employment growth from 2009 to 2015 was 4.5 percent, well above the U.S. average of 1.4 percent. Around 60,000 people are directly employed in the industry, the report found. OEMs account for about 24,800 of that number, and dealers and distributors employ about 34,900.
Those jobs pay well—average wages increased by almost 25 percent from 2009 to 2015, to $52,942, making this sector "an increasingly rare example of a thriving blue-collar industry" with opportunities to gain skills and earn "family-sustaining" wages, the report's authors wrote.
An additional 64,000 jobs are supported by suppliers to the industry; add in the estimated 86,000 "induced" positions supported by consumer spending, and the report credits industrial truck manufacturing with supporting nearly 210,000 U.S. jobs.
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