By Brett Davis – November 25, 2019
In the wake of the recent reports that unemployment rates in the United States are lower than they have been in the last 50 years, it’s imperative to keep in mind that these numbers can fluctuate vastly within regions and industries. The greater San Diego region and defense-related industries are definitely among the stronger success stories within those unemployment rates.
In October 2019, the San Diego Military Advisory Council (SDMAC) released the San Diego Military Economic Impact Study (MEIS), their annual report on the economic health of military-related jobs in the area.
Defense Jobs Trending Up Over The Last Several Years
In recent years, the SDMAC and its annual studies bear witness to the uptick in defense-related opportunities for job seekers. In an article published by Nathan Loveland, Propel Program Manager at the SDMAC, the 2018 MEIS reported a $1 billion increase of government spending over 2017, which equated to $2 billion in Gross Regional Product (GRP) and an estimated increase of 9,000 jobs.
For fiscal year 2019, this year’s MEIS reports direct spending came in at $28.1 billion. This equals a staggering $51 billion in GRP, equating to one-fifth of the overall GRP in San Diego, and 354,000 jobs alone, which accounts for 22% of all jobs in the greater San Diego area.
On the SDMAC website providing an overview of the 2019 MEIS, Executive Director Mark Balmert, explained that one of the reasons defense spending is increased in the San Diego area is because the Navy changed the balance of its fleet in Indo-Asia-Pacific Region. This change, he added, could be critical in the upcoming year, especially if the economy slows down.
In a further interview with KUSI, Balmert said the numbers are bigger than last year, but beyond that, they are “even bigger than predicted. So, we continue to see San Diego growing faster than the other military towns.”
Military Personnel In San Diego Continues To Grow
Citing statistics from the FBEI, Department of Defense, Coast Guard, the 2019 MEIS overview reported that the presence of several military branches continues to tick upward in the San Diego area as well. Coast Guard personnel grew from 820 in 2017, to 1,067 in 2018. Additionally, those numbers are projected to increase to 1,080 in 2020.
The Navy, along with the Marine Corps, has several camps and training ranges in the San Diego region, creating an essential location for military readiness, and the numbers underscore this. The Navy had a personnel count from 57,041 in 2018. This fell to 56,431 in 2019, but is projected to rise to 63,774 in FY 2020.
MEIS Highlights NAVWAR Presence
This year, the MEIS put a significant focus on the Naval Information Warfare Systems Command (NAVWAR), the Navy command in charge of development, delivery, and maintenance of their communications, networks, information, and space capabilities. Their positive economic impact will bring more jobs and more spending on the economy, and is in the process of constructing a new facility near Pacific Highway.
In 2018, NAVWAR contributed $3.2 billion to the GRP with 26,300 jobs. This is expected to grow to $3.5 billion, along with 29,000 jobs.
A news release provided by the Navy highlighted the impact of NAVWAR on San Diego. In the release, NAVWAR Commander Rear Admiral Christian Becker explained that their organization has had a long relationship with the San Diego defense and military community, and the region “has been a strong partner in executing our mission of delivering and sustaining information warfare capabilities for the Fleet and our partners around the world.”
According to this year’s report from the SDMAC, while NAVWAR brings more jobs and economic benefits to the area, they also benefit from San Diego’s military infrastructure of installations and test facilities, as well as the network of defense contractors and talent. The relationship carries even further as NAVWAR can benefit in areas of unmanned systems, medical technology, and a cybersecurity focus in IT.
San Diego’s “Mega-Cluster” Projected to Increase
According to Dr. Lynn Reaser—who, as in years past, conducted and wrote this year’s study—a myriad of industries take part in San Diego’s defense ecosystem, creating what she calls a ‘mega-cluster’ of talent. “This year’s report again shows that the defense sector and all its related activities is San Diego’s most important economic driver,” she said in the SDMAC 2019 MEIS overview. “Tourism, health care, medicine, shipbuilding—it doesn’t fit into one box. What makes it so complex is what makes it so important to our region.”
Indeed, it isn’t just about the 143,000 active duty members that call San Diego their home, Loveland wrote. It’s about their family who is part of the economy—spouses that work in the San Diego area, and their children who are in the educational system, both of which create a trickle down of employment, such as school teachers.
It’s also about the 3,072 members of the Veterans Administration currently in the area, the 7,437 personnel in Department of Defense (DoD) reserves, and 12,500 DoD civilians.
All this, combined with the fact that 65 ships are expected to make San Diego their home in 2020, results in a diversity of talent and skilled workers to fill shipyard staffing needs, such as: pipefitters, welders, electricians, engineers, and riggers.
The year 2020 continues to look extremely promising for defense-related positions. As it stands, this industry makes up the largest economic cluster, surpassing the next industry, travel and entertainment, by a 2-to-1 factor. Indeed, estimates project a 7% increase over 2019 to 378,000 jobs and an estimated $54.3 billion GDP.
Brett Davis is the Director of West Coast Operations for Ameri-Force. With a strong background in operations management and sales growth, Brett has grown the west coast division significantly since joining Ameri-Force in 2018. Formerly with Enterprise Holdings, Brett earned numerous company awards and was credited with strong fiscal growth, employee retention, and business expansion. Brett holds a Bachelors of Arts in Sociology from The Ohio State University.