New Study Estimates Minneapolis-St. Paul International Airport Generates $10.1 Billion Annually For Twin Cities Economy

MINNEAPOLIS-ST. PAUL—A new study developed by InterVISTAS Consulting LLC quantifies the economic impacts of Minneapolis-St. Paul International Airport (MSP) on the Twin Cities in 2012, focusing on the airport’s role in job creation and earnings, visitor spending, tax revenue generation and total economic output.
 
“Results of the study illustrate how vital the airport is to the strength of the area economy,” said Dan Boivin, chairman of the Metropolitan Airports Commission (MAC), which owns and operates MSP. “We tend to think of air service simply as a means of getting from point to point, but clearly it also plays a key role in moving Minnesota commerce forward.”
 
The study measures the airport’s direct impacts (those directly tied to the MSP aviation sector), indirect impacts (those related to suppliers of goods or services to the MSP aviation sector) and induced impacts (those that result from the spending of wages and profits earned in the course of direct or indirect MSP aviation activities). Also, the study measures the direct impacts of spending by people who arrive for a visit to the Twin Cities via MSP International Airport.
 
Total Economic Output
MSP injects $10.1 billion into the Twin Cities area economy. Of that, $5.7 billion is directly tied to airport operations with another $2.16 billion in indirect impacts and $2.26 billion in induced impacts. None of these impacts would exist but for Minneapolis-St. Paul International Airport.
 
Jobs
The study found the airport supports an estimated 76,340 jobs. Of those, 19,800 are directly tied to MSP operations, 13,400 are indirectly tied to operations, 17,100 are induced by operations and 1,540 stem from capital improvements to airport facilities. Another 24,500 jobs are created by the spending of visitors who arrive in the Twin Cities via the airport.
 
About 97 percent of jobs at MSP and related businesses are permanent positions. The average annual wage per full-time equivalent employee was $66,270, well above the median Minnesota household income of $58,476 recorded by the U.S. Census Bureau.
 
Roughly 90 percent of the 19,800 employees whose jobs are directly related to MSP’s operations live in the seven-county metropolitan area. St. Paul is home to 19 percent of employees and Minneapolis to 15 percent. On a countywide basis, 6,500 employees live in Hennepin County, 4,700 in Ramsey County, 4,000 in Dakota County, 1,200 in Washington County, 700 in Scott County, 600 in Anoka County and 200 in Carver County. Another 1,500 employees live in Minnesota communities outside the seven-county region, and 400 live in other states.
 
Earnings
MSP generated $2.97 billion in employee earnings, including $1.2 billion directly tied to airport operations, $600 million indirectly tied to operations, $600 million induced by operations and $70 million related to MSP capital improvements. Visitor spending generated another $500 million in earnings. These earnings are then spent by employees for goods and services, filtering through all sectors of the area economy.
 
The Visitor Industry
According to the study, 4.2 million visitors to the Twin Cities arrive via MSP. Of those visitors, 3.8 million come from other U.S. cities and 400,000 from other nations. While in the Twin Cities, those visitors spend a total of $1.9 billion, including $480 million on lodging, $450 million on gifts and souvenirs, $370 million on food and beverages, $260 million on transportation, $190 million on entertainment and $150 million on other items. On average, domestic visitors stay two nights and spend $425 in the local area, while international visitors stay five nights and spend $720 here per trip.
 
Tax Revenues
Funding for MSP operations comes from rents and fees paid by airport users, not from the state’s general fund. However, MSP generates millions of dollars in tax revenues for federal, state and local government programs. The study indicates MSP generates $611 million a year in total tax revenues, including $358 million in federal revenues, $243 million in state revenues and $10 million in revenues for local governments. About 26 percent of those taxes are paid by air travelers, with MSP employers and employees contributing 73 percent of the total tax revenue.
 
“As important as what the study measures is what it cannot measure: the number of businesses that would not be located in Minnesota or that would be less successful here if not for the presence of a major airport,” said MAC Executive Director and Chief Executive Officer Jeff Hamiel. “In today’s global marketplace, access to clients and markets throughout the nation and around the world is a must for many companies. The challenge is to ensure Minneapolis-St. Paul International Airport continues to grow along with the air transportation needs of the community.”
 
The Minneapolis-St. Paul International Airport Economic Impact Study is available online at www.metroairports.org.