Utah's Defense Economy: Economic Impacts and Industry Trends
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Joshua Spolsdoff Senior Research Economist Utah’s Defense Economy: Economic Impacts and Industry Trends Utah's defense industry is an integral component of the state's diverse economy, contributing over $19 billion in economic activity. August 2021 411 East South Temple Street Salt Lake City, Utah 84111 801-585-5618 I gardner.utah.edu Utah’s Defense Economy: Economic Impacts and Industry Trends Analysis in Brief Utah’s defense industry makes a substantial contribution to Average Compensation of Utah Jobs, 1990–2019 the state’s diverse economy, contributing an estimated $19.3 (Constant 2019 Dollars) billion to GDP (10.6% of total), and supporting 211,000 jobs. $100,000 2019: $85,377 The industry has experienced nearly twofold growth since $90,000 2015, primarily due to growth at Hill Air Force Base, Veteran $80,000 services, and a sharp rise in contract awards. 1990: $61,320 $70,000 These considerable impacts stem from the following major $60,000 components of Utah’s defense economy: 2019: $62,929 $50,000 1990: $48,981 • Hill Air Force Base • Veterans $40,000 • Dugway Proving Ground • Defense Civilian Retirees $30,000 • Tooele Army Depot • Contracts and Grants $20,000 • Utah National Guard $10,000 • Reserves, Recruiting, $0 and ROTC 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Defense Non-Defense Key Findings • Share of the Economy—In 2019, Utah’s defense sector Source: Bureau of Economic Analysis, Bureau of Labor Statistics, REMI PI+ historical data directly and indirectly supported 10.3% of the state’s Defense Sector Economic Impact Summary, 2019 employment, 9.5% of its personal income, and 10.6% of its gross domestic product (GDP). 45,000 Jobs (211,285) 10.3% 40,000 • Growth—The defense sector’s total economic impacts Jobs (211,285) 10.3% 35,000 have increased nearly twofold since 2015, increasing by 30,000 102,000 jobs and $9.1 billion in inflation-adjusted GDP. PersonalPersonal Income Income ($13.9 ($13.9Billion) Billion) 9.5%9.5% 25,000 • Key Organizations—Of the $4.3 billion in defense GDP ($19.3 Billion) 10.6% 20,000 contracts in Utah, $3.3 billion (76%) went to 10 contractors. GDP ($19.3 Billion) 10.6% Number of Jobs 15,000 Northrop Grumman, L-3 Communications, and Moog were 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 10,000 the three largest organizations, accounting for nearly $2.6 Share of State Total 5,000 billion (60%) of total contracts. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Share of State Total 0 • Jobs—Defense activities supported an estimated 211,285 Source: Kem C. Gardner Policy Institute analysis using the REMI PI+ model 1990 1991 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 full- and part-time jobs, 10.3% of total jobs in the state. $100,000 Military Civilian Defense $90,000 • Income—Defense personnel earned more than $13.9 • GDP—Utah’s$64,215 defense sector contributed $19.3 billion to $80,000 $100,000 billion in 2019, 9.5% of total personal income. Federal the state’s GDP, 10.6% of the total. 2019: $85,377 $85,377 $90,000 defense jobs in Utah offered an average of $85,377 in $70,000 • Fiscal Impacts—Defense-related activity generated net $80,000 $60,000 1990: $61,320 compensation, 35.7% more than the $62,929 at non- $62,929 $70,000 $50,000fiscal impacts of $244.3 million for the state. defense jobs. $54,907 $60,000 $40,000 2019: $62,929 $50,000 $30,000 1990: $48,981 $40,000 TM $20,000 INFORMED DECISIONS 1 gardner.utah.edu I August 2021 $30,000 $10,000 (IConstant 2019 Dollars) $20,000 $0 Average Compensation per Job $10,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $0 Defense Non-Defense 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Defense Non-Defense Jobs Personal Income GDP 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Hill AFB Dugway Tooele Guard Reserves & Other Veterans Retired Civilians Contracts & Grants Hill AFB: 42.5% Dugway: 2.0% Tooele: 0.9% $100,000 $244.3 2019: $85,377 Guard: 7.5% $90,000 Million $80,000 Reserves & Other: 2.5% 1990: $61,320 Veterans: 2.1% $70,000 DOD Civilian Retirees: 0.7% $60,000 Contracts & Grants: 41.7% 2019: $62,929 $50,000 1990: $48,981 $40,000 6% 1990: 5.5% $30,000 $20,000 5% $10,000 4% $0 3% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Defense Non-Defense 2% 2019: 2.1% 1% Defense Jobs as a Percent of All Utah 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Table of Contents Overview . 5 Figures Comparison: FY 2015 and FY 2019 ........................ 5 Figure 1: Major Military Installations in Utah. 5 Economic Impacts ....................................... 6 . Figure 2: Share of Economic Impacts by Utah Defense Fiscal Impacts ............................................ 7 Sector Component, 2019. 7 Federal Defense Employment ............................ 8 Figure 3: Share of State Net Revenue Impacts from Utah Terms Used in This Report. 9 Defense Sector Component, 2019 ........................ 8 Hill Air Force Base . 10 Figure 4: Defense Share of Total Employment in Utah, Dugway Proving Ground . 13 1990–2019 .............................................. 8 Tooele Army Depot . 16 Figure 5: Military and Federal Civilian Defense Utah National Guard . 18 Employment in Utah, 1990–2019 ........................ 8 Reserves, Recruiting, and ROTC . 21 Figure 6: Compensation per Utah Job, Defense versus Reserves ................................................21 Non-Defense, 1990–2019 ................................ 8 Military Recruiting ......................................22 Figure 7: Hill Air Force Base Non-Payroll Spending in Reserve Officer Training Corps ...........................24 Utah by Industry, FY 2019 ...............................11 Veterans . 26 Figure 8: Statewide Economic Impacts of Hill Air Medical Facilities ........................................27 Force Base, 2019 ........................................11 Benefits ................................................28 Figure 9: Dugway Proving Ground Non-Payroll Spending Contracts ...............................................29 in Utah by Industry, FY 2019. 14 Department of Defense Retired Civilians . 31 Figure 10: Statewide Economic Impacts of Dugway Defense Contracts and Grants . 33 Proving Ground, 2019. 15 DOD and VA Prime Contracts and Grants in Utah, Figure 11: Tooele Army Depot Non-Payroll Spending in FY 2000–FY 2019 .....................................33 Utah by Industry, FY 2019 ...............................17 FY 2019 Contracts and Grants ...........................34 Figure 12: Statewide Economic Impacts of Tooele Impacts of Non-Installation Defense Contracts ...........37 Army Depot, 2019 ......................................17 Impacts of Defense Grants ..............................38 Figure 13: Utah National Guard Employees Trends in Defense Employment and Compensation . 40 by Type, FY 2019 ........................................19 Defense Employment in Utah, 1990–2019 ...............40 Figure 14: Utah National Guard Non-Payroll Spending in Compensation from Defense Employment, 1990–2019 ...41 Utah by Industry, FY 2019 . 19 Methodology . 43 Figure 15: Statewide Economic Impacts of the Utah Data Collection .........................................43 National Guard, 2019 ...................................20 Estimating Economic Impacts ...........................43 Figure 16: Statewide Economic Impacts of Military Estimating Fiscal Impacts ...............................44 Reserves, 2019 ..........................................21 Acknowledgements .....................................45 Figure 17: Statewide Economic Impacts of Military Recruiting, 2019 ...........................................23 Figure 18: Statewide Economic Impacts of Federal ROTC Employment, 2019 ........................................25 Figure 19: Veterans by County in Utah, 2019 ...............26 Figure 20: Regional and Local Office VA Contract Spending in Utah by Industry, FY 2019. 29 Figure 21: Statewide Economic Impacts of Federal Spending for Veterans, 2019. 29 Figure 22: DOD Retired Civilians by County in Utah, 2019 ...31 Figure 23: Statewide Economic Impacts of DOD Retired Civilians Pension Payments, 2019 ........................32 Figure 24: Defense Contracts and Grants in Utah, Prime Awards FY 2000–FY 2019. .33 Figure 25: Utah Defense Subcontracts, FY 2015–FY 2019 ...35 August 2021 I gardner.utah.edu 2 INFORMED DECISIONSTM Figure 26: Total DOD and VA Contracts and Grants by Table 14: Statewide Economic Impacts of Dugway Proving Service, FY 2019 ........................................35 Ground, 2019 ...........................................14 Figure 27: Total DOD and VA Contract and Grant Dollars in Table 15: Statewide Fiscal Impacts of Dugway Utah by County, FY 2019 ................................35 Proving Ground, 2019. 15 Figure 28: DOD and VA Contracts and Grants in Utah by Table 16: Economic Impacts of Dugway Proving Industry, FY 2019 .......................................36 Ground by County, 2019 ................................15 Figure 29: Non-Installation DOD and VA Contracts Table 17: Tooele Army Depot Employees by County of Performed in Utah