Navy Carries Fewer Personnel, Wields More Economic Impact

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Norfolk Virginian-Pilot
October 3, 2008
By Louis Hansen, The Virginian-Pilot
NORFOLK--Despite a dip in active duty personnel, the Navy's financial presence in Hampton Roads expanded last year, with increases in total payroll, procurement and direct economic impact, according to a study released Thursday.
The total direct economic impact on the region climbed 10.5 percent to $13.9 billion, due largely to the growth in capital projects, ship construction, repair, and other goods and services purchased by the service.
"The Navy remains a significant contributor to the economy in the Hampton Roads area," said Beth Baker, a spokeswoman for Navy Region Mid-Atlantic. "Our presence here remains strong."
Vinod Agarwal, an economics professor at Old Dominion University, said the military continues to fuel the region's economy. About three-quarters of all economic growth over the past five years has come from increases in military spending, he said.
"What happens to the military affects us all," said Agarwal, co-author of ODU's annual State of the Region studies.
The number of active-duty sailors dropped by 3,500, or 4.2 percent, according to the report. Total Navy payroll to active sailors also declined by nearly $100 million. The slide in active duty personnel and payroll was almost replaced by growth in civilian service jobs, which increased by 3,100 jobs, or 11 percent. Baker said the decline was due to many shore-based military jobs being filled by civilians.
Total payroll for active duty, civilian and retired military grew by 8.3 percent, to $7.8 billion, according to Navy estimates. The Navy spent $720 million on capital improvements to bases and facilities in the region last year, Baker said. Top projects included repairs to hangars and the runway at Oceana Naval Air Station and pier improvements at Norfolk Naval Station.
Among other findings,
*Active duty personnel on shore-based commands and fleet unit both declined.
*Little Creek, Suffolk and Peninsula-based commands were the only locations to add active-duty service members.
*The region added one ship - the amphibious transport dock Mesa Verde - for a total of 94.
The Navy Mid-Atlantic region did the survey, covering the fiscal year from Oct. 1, 2006, to Sept. 30, 2007. The study included cities in South Hampton Roads and the Peninsula and counted Navy and Marine Corps personnel. The regional Navy community is estimated at 270,000 people, including civilian workers, active duty and retired personnel and their families.
 
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