SALT LAKE CITY — Military spending creates over $9 billion in economic activity for the Beehive State, rivaling the construction industry in importance to Utahns' financial well-being, a new study showed.
Research from the Kem C. Gardner Policy Institute at the University of Utah indicated that the defense industry was directly and indirectly responsible for supporting more than 109,000 jobs resulting in $9.2 billion in economic activity during 2015 — the latest available data. The study showed federal defense spending accounted for 5.8 percent of Utah’s employment, 7.1 percent of total earnings and 6.2 percent of the state's gross domestic product — one of the primary indicators used to measure the state's economic health.
“Utah’s defense industry continues to be an important contributor to the state economy with an impact in every county of the state,” said Juliette Tennert, director of economic and public policy research at the Gardner Policy Institute.
While there aren't as many defense-related jobs statewide as the construction industry, Tennert said the economic impact is about equal — making the sector "just as important" as construction in Utah.
The research was commissioned by the Utah Defense Alliance and the Utah Department of Veterans and Military Affairs to evaluate the economic effects of the state’s defense sector. The report analyzed the impacts of current operations of Hill Air Force Base, Dugway Proving Ground, Tooele Army Depot, the Utah National Guard, reserves, recruiting, ROTC and expenditures on behalf of veterans. The research also studied Department of Defense and Department of Veterans Affairs grants and contract expenditures that were unaffiliated with the installations.
Tennert said the study modeled the long-run economic and demographic impacts on the state and local economies in the event of the closure of Hill Air Force Base — for which there are currently no known plans. The base accounts for 43 to 50 percent of the total defense industry economic impact in the state, she said, supporting more than 47,000 jobs and $4.5 billion in gross domestic product.
A hypothetical closure of Hill Air Force Base by 2022 would cost the state an estimated 35,184 jobs, $2.9 billion in earnings and $3.8 billion in gross domestic product, the study showed.
Veterans in Utah also generated significant economic impact, supporting more than 24,000 jobs and $1.9 billion in gross domestic product for Utah in 2015. Veterans Affairs and Department of Defense spending for Utah veterans was $1.8 billion, researched stated.
“With the Trump administration’s recent proposals to increase defense spending, this could mean additional money and jobs for Utahns,” Tennert said. "If there are additional investments in defense as a whole, Utah is well-positioned for those (economic) impacts to grow."
She noted that the Beehive State would have a "competitive advantage" due in part to the state's strong aerospace sector. Increased defense spending would "play well" in Utah, Tennert said.
The Governor's Office of Economic Development also touted the importance of the state's aerospace industry in Utah's overall economic success.
"This sophisticated industry strengthens our diverse economy and provides a robust infrastructure statewide," said GOED Executive Director Val Hale. "As it continues to grow, Utahns benefit from highly skilled job opportunities."