The New England economy benefited from $33.9 billion in federal defense and homeland security contracts in 2011, an 85 percent increase from eight years ago, according to a new study from the University of Massachusetts Donahue Institute.
Defense and Homeland Security contracting is responsible for more than 319,000 jobs with a total payroll of more than $22.6 billion in the six New England states. The total direct and indirect economic activity by these contracts exceeded $62 billion in the region last year.
The high number of contracts is due to a comprehensive supply chain in the region, according to the report. “While major contractors may appear distinct, in reality multiple companies are involved in the production of advanced defense systems,” the report noted. “It is the interaction of the supply chain across New England that creates such a strong cluster of businesses and workers linked to defense production activities across the region.”
Massachusetts was the top earner in the region, receiving nearly $13.9 billion in defense and DHS contracts, which was an increase of 83 percent over the study period from 2003 to 2011. The contracts are responsible for 130,000 jobs in the state, with most of that spending going towards professional, scientific and technical services for research and development.
Connecticut received the second largest revenue boost in the region from contracts valued at $12.7 billion, up 58 percent from 2003, which accounted for more than 101,000 jobs.
New Hampshire gained $1.3 billion from defense contracts, a 123 percent increase to the state since 2003. Maine’s contracts for productions of ships at General Dynamics Iron Works facility in Bath brought in $5 billion in 2011, compared to the $1 billion eight years earlier.
Rhode Island and Vermont received the smallest economic boost from defense and DHS contracts, taking in less than $1 billion in 2011.
States like Rhode Island, New Hampshire and Connecticut benefited from out-of-state defense contractors that farm out some of the contracting duties.
“If we collaborate as a region, across borders and across parties, we should be able to deliver solutions from new employers, researchers and expand the role we have in serving missions,” said Christopher Anderson, president of the Defense Technology Initiative, in Bloomberg.
The Defense Technology Initiative and the Donahue Institute will release further studies on Connecticut, Massachusetts, and Rhode Island in the fall.
