Economic impact study shows continued strength of domestic aluminum industry

A new study shows the continued importance of the U.S. aluminum industry to the national economy. Research conducted by economic research firm John Dunham & Associates found that the domestic aluminum industry directly employs nearly 161,000 workers and contributes more than $75 billion to the national economy. When supplier and induced impacts are taken into consideration, the industry is responsible for nearly 713,000 jobs and $186 billion in economic impact—more than 1 percent of national GDP.

The report is an update of a study completed by Dunham & Associates in fall 2013. While certain segments of the domestic aluminum industry have struggled in recent years, with major job losses particularly in the upstream segment of the business, these losses have been offset by gains in downstream sectors such as flat-roll products, extruded products, and foundries. Demand growth for the metal has continued, including a near doubling of aluminum shipments to the transportation sector since 2009. In total, direct jobs supported by the U.S. aluminum industry ticked upward slightly from the 2013 report, from roughly 157,000 to nearly 161,000 jobs.

Other key findings in the report include:

• Workers directly employed by the U.S. aluminum industry earn more than $12 billion in wages and benefits.
• Indirect employment creates an additional $34 billion in wages and benefits.
• When all employment supported by the industry is taken into account, these jobs generate more than $18 billion in federal, state, and local taxes.

"While we're pleased to see the net growth in our industry's jobs footprint, it's important not to lose sight of the significant job losses we've seen in certain segments, which is largely a consequence of overproduction of aluminum in China," said Heidi Brock, president/CEO of the Aluminum Association. "In less than three years, nearly 60 percent of our industry's domestic alumina refining and primary aluminum smelting jobs have disappeared."

According to the Aluminum Association, unsustainable aluminum production practices in China have forced the closure or curtailment of eight U.S. aluminum smelters since the beginning of 2015. Overproduction, along with unfair trade practices, is having a direct impact on the ability of the domestic upstream business to operate competitively.

At the same time, according to the latest industry estimates, North American aluminum producers shipped nearly 26 billion lbs. of aluminum in 2015, the most since 2007. And since 2013, member companies have announced domestic plant expansions and planned investment totaling more than $2.6 billion to meet anticipated demand growth for aluminum in the automotive sector as automakers strive to make better-performing and more fuel-efficient vehicles.