North Carolina Defense Spending Rises in 2011

Defense Contractors

North Carolina has long been a military epicenter, but despite an economic downturn it’s remaining a prime place for defense contractors, as well. Defense contracts increased 13 percent last year, according to a report from Gov. Bev Perdue’s office and the N.C. Military Business Center (NCMBC). Overall military spending in the state increased from $3.6 billion in 2010 to $4.1 billion in 2011, according to the report.

“Defense spending in North Carolina is critical to expanding our economy and growing jobs in North Carolina,” said Scott Dorney, executive director of the NCMBC. “The defense and federal market is still booming.”

Last year, businesses in 87 of North Carolina’s 100 counties performed defense-related prime contracts. Twenty-two of those counties received more than $20 million in defense-related work and 12 received more than $50 million in defense-related work. Of all counties performing defense-related work, Onslow County received the highest dollar amount with $1.2 billion, surpassing Cumberland County by $51 million.

The military has a $23.4 billion total annual impact on the state economy, according to a 2008 Department of Commerce study. Defense procurement in North Carolina increased from $3.595 billion in federal fiscal year 2010 to $4.067 billion in 2011. Also, spending by all federal agencies in North Carolina increased approximately $507 million, from $5.381 billion to $5.889 billion.

Economic development officials in the eastern North Carolina will soon issue the N.C. Logistics Initiative intended to capitalize on the military’s cost-cutting and energy-saving measures. The initiative is basically a combined marketing and lobbying effort that seeks to encourage investment in Eastern North Carolina by private firms that perform ground systems maintenance for the military.

“Overall, it’s about expanding the things we do in North Carolina with the military and building our defense economy in a way that actually makes sense,” said Mark Sutherland, vice president of North Carolina’s Eastern Region and director of the Military Growth Task Force, in Carolina Coast Online.

North Carolina ranks as a top state for businesses due to its tax structure, quality workforce and low unemployment insurance rates, according to Sutherland. Military jobs grew by 20 percent during the past five years in the state, which is the third fastest growing state in terms of industrial growth, he said. Defense-related businesses moving into the state have kept a similar pace.

Chandler Harris is a freelance business and technology writer located in Silicon Valley. He has written for numerous publications including Entrepreneur, InformationWeek, San Jose Magazine, Government Technology, Public CIO, AllBusiness.com, U.S. Banker, Digital Communities Magazine, Converge Magazine, Surfer's Journal, Adventure Sports Magazine, ClearanceJobs.com, and the San Jose Business Journal. Chandler is also engaged in helping companies further their content marketing needs through content strategy, optimization and creation, as well as blogging and social media platforms. When he's not writing, Chandler enjoys his beach haunt of Santa Cruz where he rides roller coasters with his son, surfs and bikes across mountain ranges.