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Military construction helps shore up industry in San Diego

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Military construction in San Diego County has boomed over the past several years, with nearly 80 projects awarded in 2009 and 2010 alone, valued at approximately $2.4 billion.

The figures, from a joint report from Point Loma Nazarene University’s Fermanian Business Center and the San Diego Military Advisory Council, showed military construction has helped the San Diego economy during the recession.

"These numbers were staggering," said SDMAC President Tony Nufer, who also is a senior manager at CSC, a computer services company that does defense work.

Much of the work is being done on Camp Pendleton. New projects range from nonresidential buildings like a $563 million hospital to various bachelor enlisted quarters near the base.

Additionally, maintenance work awarded at various bases was valued at more than $420 million.

Though some of the work comes from an influx of stimulus money to the region, military construction spending has been on the rise since 2007. Military construction has quadrupled since that year.

Part of the expansion is due to Navy plans to have 60 percent of its fleet on the West Coast. Formerly, there was a 50-50 split between the West and East coasts.

This year alone spending on military construction is expected to be $1.4 billion in 2010, with a ripple effect of $2.3 billion in total economic output.

While military construction spending boomed over the past three years, civilian construction dropped from $4.5 billion in 2007 to $2.5 billion in 2009.

The military money spent in the region has helped stave off a sharper downturn in the construction industry, said Lynn Reaser, the chief economist of PLNU's Fermanian Business Center.

"We see a huge ripple effect throughout the economy," she said.

The study said there is an additional $75 of economic output for every $100 spent on military construction.

The study estimated military construction spending would create 15,500 jobs in 2010.

"It's important to realize these are good jobs we're creating. They earn good salaries," Reaser said. "If you look at the ripple effect, the average job that will be created as a result of military spending will pay about $62,000 per year in 2010."

The largest chunk of construction spending in 2010 and 2009 was a $563 million hospital on Camp Pendleton that was awarded through the national stimulus plan.

Reaser said stimulus funding has made significant contributions to military construction growth over the past couple years, and added that the primary driver of increased spending has been the Department of Defense.

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Point Loma Nazarene University, Fermanian Business Center

Company Website

3900 Lomaland Dr.
San Diego, CA 92106

Point Loma Nazarene University, Fermanian Business Center Executive(s):

Randy Ataide

  • Director

Lynn Reaser

  • Chief Economist

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