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Study: Defense industry responsible for $50.3 billion economic impact

MONTGOMERY, Ala. – A new economic impact study released Monday found that the defense industry accounted for an annual economic impact of $50.3 billion, providing 264,780 jobs across Alabama with an annual payroll of $19.3 billion.

Based on data from 2019, the study was produced by the University of Alabama’s College of Business in Huntsville, and funded by the Alabama Military Stability Commission chaired by Alabama Lt. Gov Will Ainsworth.

“From aerospace development in the Tennessee Valley, to shipbuilding in the Gulf Coast and at all points in between, the defense industry is vital to Alabama’s economy and job creation efforts,” Ainsworth said in a written statement.

“The numbers in this report make the irrefutable case that Alabama must preserve and expand the defense infrastructure already located here while also attracting new companies and assets, as well.”

According to the study, Alabama consistently ranks among the top ten states in defense spending, which consisted of nearly 7% of the state’s gross domestic product in 2019, the third highest rate in the country. Its annual economic impact of $50.3 billion makes up 21.8% of the entire Alabama economy.

Of the 264,780 jobs created by the defense industry, 96,340 are held by active duty military personnel, while 168,439 are held by private military contractors.

For the purposes of the study, the state was divided into eight regions, most of which are anchored by an active military base. By far the largest military base is Redstone Arsenal in Huntsville. It employs 143,156 people and accounts for $27 billion of the $50.3 billion economic impact.

A breakdown of all regions as well as their payroll and job figures can be viewed below.

Region Jobs Payroll
Redstone Arsenal Region 143,156 $13.2 billion
Fort Rucker Region 28,865 $2.7 billion
Maxwell/Gunter Region 26,706 $1.9 billion
Coastal Region 21,331 $1.02 billion
Anniston Region 13,102 $1 billion
Birmingham Region 2,583 $146 million
Dallas County Region 559 $15 million
Marion County Region 22 $1 million

Nearly 75% of private contract jobs were concentrated in four industries: research and development, engineering services, aerospace manufacturing, and ship and boat building. On average, jobs in these four fields pay $80,409, 68% more than the state’s average annual wage.

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