Economic Impact Study — University of South Carolina
In 1992, German automaker BMW AG announced it was locating its first North American manufacturing facility in Spartanburg County. Ten years later, the economic impact is enormous: the company supports 16,691 jobs statewide and accounts for $691 million in wages and salaries annually, according to a University of South Carolina study released today.
The jobs figure is the result of an economic multiplier effect of 3.9. This means that for every direct job at the Upstate facility, almost three additional jobs are created elsewhere in the state’s economy. A typical employment multiplier for South Carolina industries and services is closer to two.
“BMW is known worldwide as the ‘ultimate driving machine,'” said Dr. Douglas P. Woodward, director of the Division of Research at the Moore School of Business and the study’s lead investigator. “The results of our study make it clear that BMW is an important economic development driver, as well.”
Conducted earlier this year by Woodward and other analysts in the Division of Research at the Moore School, the study found that:
- Of the 16,691 jobs supported by BMW, 4,327 are at the Spartanburg County plant. The remainder are outside the BMW plant but are supported by the plant’s operations.
- The total economic output associated with the company’s activities in the state tops more than $4.1 billion annually.
- After accounting for the increased costs incurred by state government, South Carolina receives $27.6 million in net revenues (sales and income tax minus costs) each year as a result of the BMW facility’s presence.
- Overall, the four Upstate counties most affected by BMW’s presence ¾ Anderson, Greenville, Laurens, and Spartanburg ¾ receive $2.4 million annually in additional net revenue.
- Local school districts in those four counties net $3.2 million annually – money than can be spent on additional projects that otherwise would not be possible.
- Of the $691 million that the plant generates annually in total personal income for state citizens, the plant itself accounts for $345 million. Supplier and other indirect effects account for the rest.
Since the 1992 announcement, BMW has invested $1.9 billion at its Spartanburg County facility. The German car manufacturer “creates significant employment opportunities, enlarges incomes, and adds substantially to capital investment in South Carolina,” Woodward said.
The study also examined the role BMW has played in the “manufacturing revival of South Carolina.” BMW is contributing to the long-term economic development of the state “by forging a highly advanced industrial cluster,” the report said. “Through the introduction of custom manufacturing, agile production techniques, and transferring knowledge through its local supplier network, BMW’s investment has a far-reaching effect on the state’s competitiveness.”
The research team at the Moore School of Business independently designed the methodology and assumes full responsibility for the integrity of the results. The study is based on an objective research design and widely accepted modeling techniques that “if anything, tend to understate BMW’s role in economic development,” Woodward said.
The full report is available online at research.moore.sc.edu.