Pentagon spending in Arizona fell sharply in fiscal
2021, a part of an general decline in expenditures nationally that bumped
the state from seventh place amongst states to thirteenth, in keeping with Protection
Division knowledge launched this fall.
Army spending general within the state fell from $20.2 billion in fiscal 2020 to $14.6 billion in fiscal 2021.
That was a sharper drop than the 5.6% decline in spending nationwide
throughout the identical interval, when mixed spending on contracts and army
personnel fell from $593.9 billion to $559 billion.
However analysts stated that whereas Arizona could have slipped in its standing
amongst states, the drop is just not trigger for concern. The protection business
stays a pillar of the state’s economic system. they stated, and can seemingly
proceed to be so for the foreseeable future.
“When it comes to a superb atmosphere and a welcoming atmosphere, Arizona
is positioned very effectively to proceed that progress on this business,” stated
Todd Sanders, president and CEO of the Larger Phoenix Space Chamber of
Commerce.
The Pentagon spent
$398.7 billion nationally on contracts in fiscal 2021 – a drop from
$439.4 billion a yr earlier than – however that was partially offset by an
enhance in spending on personnel employed by the Protection Division,
which went from $154.6 billion to $160.3 billion in the identical interval.
Pima County, residence to Davis-Monthan Air Drive Base close to Tucson, noticed
spending on army salaries and advantages develop from $746 million in
fiscal 2020 to $764.6 million a yr later. Michael Guymon, president
and CEO of the Tucson Chamber of Commerce, stated that personnel spending
“demonstrates that the Division of Protection continues to be very dedicated to
Davis-Monthan and the missions that come out of Davis-Monthan.”
Guymon additionally praised the “nice expertise” that comes out of the
College of Arizona’s engineering division, which he stated helps
contribute to Tucson’s strong protection economic system.
Army contracts have lengthy been a staple of the Arizona economic system,
which incorporates multinational protection producers resembling Boeing,
Raytheon and Northrop Grumman, amongst others. However contract spending took a
hit in fiscal 2021 each nationally and in Arizona, with contracts in
the state falling from $15.7 billion to $12.3 billion, in keeping with the
Pentagon report for 2021.
Boeing noticed its contracts in Arizona fall from $2.2 billion to $1.2
billion over the yr. However Kathleen Jolivette, vp of Boeing
Mesa’s assault helicopter program, stated in a ready assertion that she
appears to be like ahead to the long run, noting the “strong and steady protection
demand” within the U.S.
Jolivette stated Boeing in Arizona has been targeted on delivering a
continued provide of Apache helicopters, working to ship “the perfect
functionality to the warfighter right this moment whereas innovating for the long run.”
Regardless of the Military reducing its orders for Apache helicopters from 49 in
fiscal 2021 to 30 in fiscal 2022, Jolivette stated that “robust
worldwide gross sales make up the gaps.”
“Our portfolio is effectively positioned and our future franchise packages have a protracted runway forward,” Jolivette stated.
The fiscal 2021 numbers nationwide don’t mirror billions in
spending this yr on army help to Ukraine in its struggle with
Russia. The state rankings had been additionally skewed by “massive contracts to
Pfizer, Inc. and Regeneron Prescribed drugs, Inc. in New York” and to
“Moderna, Inc. in Massachusetts” to amass COVID-19 vaccines, the
Pentagon report stated.
“The contracts in New York and Massachusetts had been associated to COVID-19
vaccine and remedy purchases by DoD, in coordination with the U.S.
Division of Well being and Human Providers,” the report learn.
The Pentagon additionally stated that whereas eight of the ten corporations on its
checklist of the highest 10 contractors had been there earlier than, Pfizer and Moderna
“had been each new to the checklist and are anomalies for conventional protection
spending.”
Over the previous decade, Arizona has been as little as thirteenth amongst states for protection spending – in fiscal years 2016, 2017 and now 2021 – and as excessive as seventh place in fiscal 2020.
“Clearly, this spending is essential for Arizona,” Sanders stated. “We
regarded on the stats for 2021 and as you take a look at the remainder of the economic system,
you noticed the same drop in revenues or spending with the remainder of the
economic system on account of COVID.”
Sanders stated the slowdown in protection spending was a “delayed impact of the financial slowdown from COVID.”
However he expects the slowdown is simply short-term and reiterated the
significance of protection to Arizona, the place the Arizona Commerce Authority
says 56,500 employees are employed in aerospace or protection jobs.
Equally, Guymon stated the protection business in Tucson is an efficient one
to guess on. And, he stated, it’s not simply the heavy-hitters like “Raytheon
and Davis-Monthan.”
“It’s additionally the 200-plus different corporations within the aerospace and protection
business right here in southern Arizona,” Guymon stated. “From a purely financial
growth standpoint, Tucson and southern Arizona have the
fifth-highest focus of aerospace and protection workers within the
nation.”