View Full Version : Study: Military still economic powerhouse in region

02-01-07, 07:02 AM
Study: Military still economic powerhouse in region

Wed Jan 31, 8:55 PM ET

Despite a diversifying economy, with sectors like biotechnology and telecommunications emerging and succeeding in San Diego, the old military standby is still going strong.

The San Diego Regional Chamber of Commerce presented a military economic impact study Wednesday. With data from 1993 to 2004, the study examines the overall economic impact, trends in defense spending, effects on employment, effects on earnings and the economic impact of defense installations in San Diego County.

There are three major Naval installations in San Diego: On Coronado Island, in Point Loma and at the 32nd Street base. The Marines have four installations: Camp Pendleton, the Marine Corps Air Stations at Miramar and Camp Pendleton and the Marine Corps Recruit Depot.

In 2004, the military spent $11.7 billion in the region, 9.34 percent of total economic output in the county. Military output composed $18.3 billion, or 14.65 percent of total gross regional product.

The military's contribution to the gross regional product (GRP) in 2004 was placed at 14.65 percent, a drop from 1993's rate of 20.5 percent. Brett Hamsik, head author and researcher of the study with Export Access, noted the reason for the drop was the introduction of more industries and the diversification of the San Diego economy.

"By no means is the defense department spending for a smaller piece of the economy," he said.

"There's been a tremendous growth in other sectors," added Scott Alevy, vice president of public policy and communications for the chamber. "There have been more jobs (overall) created."

The study showed that, despite recent diversification of the economy, the military continues to be a powerhouse in San Diego.

The study, which took several months to complete, is the most comprehensive and reliable analysis on the matter available, chamber President and CEO Ruben Barrales said.

"We hope it will set a benchmark," he added.

The military provides nearly 148,616 uniformed jobs and indirectly creates 142,530 jobs.

Defense spending generated $5.6 billion in earnings, nearly 9 percent of total earnings in San Diego. In 2004, nearly $12 billion of output was directly tied to naval bases. Marine bases generate about $3 for every $100 of economic output.

The study added that a future Navy Broadway Complex potentially could add as much as $2.7 billion for the economy and 220,000 jobs. The chamber's board of directors voted to officially endorse the project last year, as well as Proposition A, a measure proposing the joint military-commercial use of MCAS Miramar.

The study showed a rise in procurements contracts starting in 2002, the beginning of the United States' involvement in Afghanistan and Iraq. Questions arose as to whether the military boom was dependent on the country's involvement in the Middle East.

Data sources came primarily from consolidated federal funds reports, with help from the U.S. Department of Defense's data on procurement contracts.