Thursday, September 26, 2013
SAN DIEGO The fifth annual military economic impact study finds defense spending will likely continue to drop. The study was compiled by the Fermanian Business and Economic Institute at Point Loma Nazarene University.
The military remains an economic force in San Diego, but the region is already feeling the impact of a shrinking defense budget.
The review of the military's economic impact in San Diego shows the military spends nearly $25 billion annually here and that is responsible for creating 300,000 jobs. The military generates about a fifth of the region's economic activity, according to the report, but defense budgets are shrinking.
"In 2014, we're likely to see some reductions in personnel counts, some reductions in contracts, and cutbacks in research grants," said Lynn Reaser, an economist at Point Loma Nazarene University. "We still will see increases in payments for veterans and retirees, but overall defense spending and jobs linked to the military will be down."
The Navy's 53 ships home-ported here bring $4 billion into the region, according to the report; an aircraft carrier alone generates an economic impact of half-a-billion dollars. Admiral Patrick Lorge is the Commander of Navy Region Southwest and he said defense budgets are tightening, but not drastically.
"I don't know the exact number, the budget guys back in D.C. know that. It'll be somewhat less than what we're doing now, but not something we haven't seen in the recent past," said Lorge.
Some budget-cutting moves will actually help the local economy. The Navy is stationing more of its fleet in the Pacific theater and San Diego is poised to take a leadership role in the development of unmanned military vehicles.