01 Overview
02 Talent Pipeline
03 Industry Ecosystem
04 Labor Analysis
05 Operating Cost Analysis
06 Quality of Life

Secure your future in Greater Phoenix with 

Aerospace and Defense

A top hub in the nation for Aerospace and Defense.

 

Greater Phoenix is a top market in the nation to locate, relocate, or expand your aerospace and defense operations. In fact, the region’s aerospace and defense sector is one of the largest in the nation.

 

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Contents

1
Overview
2
Talent
Pipeline
3
Industry
Ecosystem
4
Labor
Analysis
5
Operating
Cost Analysis
6
Statutory
Incentives
1

Overview

Greater Phoenix, also known as The Connected Place, has long been a top market in the nation to locate and expand aerospace & defense (A&D) operations.

Value Proposition

Large Existing Cluster

Greater Phoenix is composed of many of the largest A&D companies in the world. The emerging commercial space sector validates the market for aerospace R&D.

Local Innovation

Greater Phoenix is home to top company HQ’s like Honeywell Aerospace and AQST, and universities recognized globally for innovation.

Educated Workforce

Greater Phoenix is home to a highly specialized workforce with specialties in a variety of relevant fields. There are a variety of business operation types that equate to a flexible labor pool.

Exceptional Talent Pipeline

Greater Phoenix has over 1,900 graduates from relevant programs each year with more graduates in relevant college-level programs than competitor markets, including those with larger industry clusters

Competitive Operating Costs

Major competitor markets are up to 25% more expensive than Greater Phoenix. The state offers a number of quality incentives to further decrease operating costs for those in the aerospace and defense industry.

2

Talent Pipeline

Greater Phoenix boasts competitive non-distance program completions at colleges and universities in the concentrations of aerospace and defense.

Below are total numbers of non-distance program completions at Greater Phoenix colleges and universities for aerospace, industrial, computer & software engineering; geographical, atmospheric, physical & Earth sciences; military technology systems design & maintenance; and air transportation programs in 2018.

Aerospace and Defense in Phoenix

Nationally Recognized Programs in Aerospace and Defence

K-12 Stem Initiatives

The Arizona STEM Network, led by the Science Foundation of Arizona, leads a number of initiatives and brings together educators of all levels to improve STEM education in the Arizona K- 12 system, improving the quality of Arizona’s talent pipeline in the long term. Among these is the HELIOS STEM Schools pilot program that develops a system to provide the infrastructure, resources and metrics needed to improve educational outcomes in STEM fields.

3

Industry Ecosystem

Industry Leaders Soar In Greater Phoenix

Industry-leading firms in aerospace and defense have critical operations in Greater Phoenix. Whatever the operation type, Greater Phoenix has demonstrated that it has the ecosystem to allow both legacy and emerging aerospace & defense companies to thrive.

Location Quotient or LQ is a measure of market specialization in an industry achieved by comparing the share of that market’s employment in an industry to the national proportion of that industry’s employment. For example, Phoenix’s LQ of 2.15 indicates that the market has 115% higher concentration of the A&D cluster than the nation as a whole.

The figure below shows the magnitude and specialization of major markets’ workforce in the Aerospace & Defense cluster. As can be seen, Greater Phoenix has a large and highly concentrated workforce that outpaces aerospace hubs like San Diego and St. Louis.

Aerospace and Defense in Phoenix

4

Labor Analysis

Understand the labor market in Greater Phoenix for Aerospace and Defense compared to competitor markets.

For reference, the labor pool in each metro for relevant occupations in all industries has been provided below. It should be noted that several of these markets have large information technology sectors, which explains disproportionately larger counts of software developers and computer systems analysts.

Occupation Phoenix Los Angeles San Diego San Francisco Seattle St.Louis Wichita
Software Developers, Applications 12,871 30,043 10,969 42,980 52,769 7,721 892
Computer Systems Analysts 9,672 18,830 5,669 14,637 13,722 6,956 521
Software Developers, Systems Software 7,655 22,813 8,220 16,911 15,134 3,694 365
Aircraft Mechanics and Service Technicians 4,256 5,934 4,872 2,953 6,285 1,936 1,282
Electrical Engineers 3,193 8,252 3,803 4,179 4,148 2,241 365
Mechanical Engineers 2,897 9,737 3,814 3,267 4,909 1,801 681
Computer Network Architects 2,275 5,142 1,496 3,802 3,347 1,489 137
Aerospace Engineers 2,073 4,456 1,842 1,921 5,486 604 1,869
Aerospace Engineering and Operations Technicians 719 435 922 490 413 70 353
Avionics Technicians 333 838 986 445 1,718 384 747
Atmospheric and Space Scientists 87 241 348 162 268 62 51
Total 46,032 106,720 42,941 91,747 108,198 26,957 7,263
5

Operating Costs

Aerospace and Defense Companies Thrive in Greater Phoenix

With lower operating costs and great tax incentives, Greater Phoenix has become a top hub for Aerospace and Defense companies.

The Annual Business Operating Cost Analysis has been prepared using the following parameters as an estimate for A&D product development in competitor markets. Component and custom analyses to match your company’s operations can be provided upon request.

Assumptions

  • $20,000,000 personal property investment
  • 50,000 square foot Industrial Manufacturing, Lease
  • Utilities (per month):
    • Electricity: 40W, 10,00KWh
    • Water/Wastewater: 3,000cf, 5/8 meter
  • 150 jobs (Bureau of Labor Statistics equivalent occupations)
Occupations Employment
Aerospace Engineers 63
Software Developers, Applications 25
Software Developers, Systems Software 13
Computer Network Architects 12
Electrical Engineers 12
Mechanical Engineer 12
Computer Hardware Engineer 8
Computer Systems Analysts 5
Total 150

Operating Cost by Region

Source: Applied Economics Metrocomp Tool, November 2019

6

Statutory Incentives

Arizona is ranked in the top 20 states for doing business in 2019. With a competitive tax environment and additional incentives, Greater Phoenix is a perfect location for expanding, relocating, or building in the Aerospace and Defense Industry.

 

Statutory Incentives

Even with the highly competitive tax environment in Greater Phoenix and Arizona, there exist a number of tax incentives that can be utilized to mitigate operating costs. Incentives will depend on actual project parameters and varying program qualifications and requirements as determined by the Arizona Commerce Authority.

Quality Jobs Tax Credit

Quality Jobs provides tax credits to employers creating a minimum number of net new quality jobs and making a minimum capital investment in Arizona. The Quality Jobs Tax Credit offers up to $9,000 of Arizona income or premium tax credits over a three-year period for each net new quality job. The tax credit is equal to $3,000 per qualified employment position, employed for each full taxable year of continuous employment for three years. If the allowable tax credit exceeds the income or premium tax liability, any unused amount may be carried forward for up to five consecutive taxable years. Employers must cover 65% of employee health insurance premium costs. To receive additional information, please download our full research document.

Want to see a full list of companies in Greater Phoenix? Download the complete report.