06/27/2012 by Cheryl Getuiza

San Diego economy watching out for military cuts

Navy sailors lining ship

This article originally appeared on the California Economic Summit blog.

San Diego is synonymous with a few things: sand, sun and surf. But one can’t forget, of course, the military. It’s estimated that 25 percent of the region’s jobs are connected to military spending.

The coming year is shaping up to be pivotal for San Diego and the military economy there. A recent report on the impact of the military on the San Diego economy highlighted the huge numbers that spending generates. 

But, a coalition of local business groups is sounding an alarm that looming budget cuts could be an economic bombshell.

The San Diego Advisory Military Council released its annual military economic impact report stating $20 billion will be pumped into the economy from direct spending. Broken down, that’s more than $6,500 for every county resident.

In 2010, the military contributed $19.1 billion; 2011, it was up to $20.3 billion; this year, it’s $20.6 billion and 2013 will see a slight increase of $20.7 billion.

Here’s more from the report:

  • The military employs 311,000 people in the county, that’s one in every four jobs. They include engineering, food services and shipbuilding.
  • San Diego’s unemployment rate would be half a percentage point lower than the reported number if Navy and Marine Corps jobs were included.
  • Defense related activities and spending will generate $32 billion of gross regional product for San Diego County in 2012. That’s more than the economic output for Colorado Springs, Colorado or El Paso, Texas.

Days after the report dropped, a group of business leaders parachuted into the discussion to warn that possible military cuts, which would be triggered if no deficit deal is made in Congress by January 3, are going to be painful. 

The group, called “Operation San Diego,” is worried the scheduled $600 billion in scheduled cuts are going to be made across-the-board, without precision or input from Congress.

The military advisory council report states, “National security spending as peaked, for at least the near term. San Diego will not be immune to the planned cutbacks in troop levels and spending.” 

But, the report goes on to say, the region will do better than others with even greater defense clusters. Here’s why: the arrival of Navy ships in the next few years and greater emphasis on unmanned aerial drones.

With $20 billion of the $177 billion annual economy in the county, all of San Diego will be watching what happens in Washington. 

Categories: Economy

More Stories +Share this Post