Military Brought $53B to San Diego in 2019: Economic Impact Report

Author: Andrew Johnson and Alex Presha
Published: Jan 01, 1970
San Diego

The military is responsible for bringing in billions of dollars and hundreds of thousands of jobs to San Diego County, according to a new economic study released Thursday.

The San Diego Military Advisory Council (SDMAC) released its annual study, which found the military contributed to more than $51 billion to the region’s gross regional product. It also provided 350,000 jobs with an estimated 22,000 on the way.

“The largest economic contributor to our region is the military. One in every five jobs is associated with a defense contract,” said SDMAC executive director Mark Balmert.

The author of the report, Point Loma Nazarene University chief economist Dr. Lynn Reaser, broke down the $51 billion sum, citing just more than half was direct military spending.

The military spent $28 billion from Oct. 1, 2018, to Sept. 30, 2019, known as the 2019 fiscal year.

“As these dollars ripple or actually cascade through our economy, they go through various supply chains and then support additional jobs, with those people spending incomes and creating even more jobs,” Reaser said.

The remaining $23 billion accumulated from ripples from the military’s initial spending, Reaser said. The total $51 billion represents one-fifth of San Diego’s economic value.

“This year’s report again shows that the defense sector, and all its related activities, is San Diego’s most important economic driver. We call it a super, a mega-cluster because it cuts across so many of our traditional economic boxes,” Reaser said.

Reaser said some of these “traditional economic boxes” include technology, manufacturing, and healthcare – all of which the military interacts with.

“As these dollars ripple or actually cascade through our economy, they go through various supply chains and then support additional jobs, with those people spending incomes and creating even more jobs,” Reaser said.

Reaser said during the 2019 fiscal year, the military’s economic impact grew 3.5 percent, and she estimated that it could jump to six percent the next year. Reaser said Congress’ increase to defense spending and San Diego’s rebalancing of its fleets in the Indo-Asia-Pacific Region were part of this growth.

One of the biggest recipients of the military’s spending is the National Steel and Shipbuilding Company (NASSCO).

Currently, NASSCO is contracted on two Navy programs in San Diego. NASSCO will build the first six of 20 ships in the Fleet Oiler program, and it will build two more ships – with the possibility of a third – for a separate Navy program.

“The work that we currently have today at NASSCO – that work is going to carry us for about eight to 10 years,” NASSCO spokesperson Dennis Dubard told NBC 7. “And that’s the best position NASSCO’s been in in a number of years. So, we’re very excited about that.”

NASSCO employs about 3,100 employees in the region.

“The support we enjoy allows us to focus on that primary war-fighting mission, and then devote the time that we have available to supporting our families and our Marines and sailors,” said Marine Corps Installations West Brig. Gen. Kevin J. Killea.

The report also outlined the upcoming redevelopment plan for the Naval Information Warfare Systems Command, which is estimated to bring in an additional $3.2 billion to the region’s economy.

“This relationship between the military and San Diego is the best in the nation,” said San Diego Mayor Kevin Faulconer. “It is the best. We work on that every single day. We are proud of that fact, and we do things in partnership.”

The 11th annual Military Economic Impact Study was released during a press conference at the Admiral Kidd Catering and Conference Center near Naval Air Station North Island at 10:30 a.m. Wednesday.

The study was led by San Diego Military Advisory Council, the Point Loma Nazarene University Fermanian Business and Economic Institute, and various local businesses. Before its inception, the military’s economic impact on the region was not independently documented.