NEWPORT – The Southeastern New England Defense Industry Alliance released its report on “The Economic Impact of the Rhode Island Defense Cluster” on Wednesday, as part of the organization’s annual Defense Innovation Days held in Newport.
According to the report, the Defense Cluster supported $4.3 billion in economic output in 2016 and supported 29,196 jobs in Rhode Island.
The Defense Cluster is made up of the private defense industry, civilians employed by the Department of Defense, U.S. Coast Guard, the U.S. National Guard and the military-defense infrastructure.
The report measured the cluster’s economic impact directly and indirectly as well as the cluster’s induced economic value.
Combined, the Rhode Island Defense Cluster was estimated to have made a $4.3 billion impact:
- Direct impact: Economic stimulus created solely by the Defense Cluster was estimated at $3.1 billion in 2016.
- Indirect impact: The impact of the supply chain to the Defense Cluster was estimated to have stimulated $354.7 million in 2016.
- Induced impact: An estimation of earnings and output created by the spending of income earned from both the direct and indirect stimulus impact of the Defense Cluster, which was estimated to be $822.7 million in 2016.
The reverberation of economic stimulus such as this is called the Multiplier Effect.
The report was written by Edinaldo Tebaldi, a professor of economics at Bryant University.
“Rhode Island’s Defense Cluster continues to grow and with it comes the need for a highly skilled workforce,” Stefan Pryor, Rhode Island Secretary of Commerce, said in a news release. “We are working hard through our Real Jobs RI program to prepare the next generation of the workers who will join the workforce with the skills needed to be successful in this innovative and growing Cluster.”
Tebaldi also calculated that the Defense Cluster generated $146.9 million in tax revenue for state and local government in 2016.
The report noted that of the 16,011 full-time equivalent Defense Cluster employees, the Defense Cluster employed 6,829 workers in the private defense industry; 4,824 civilians by the Department of Defense, U.S. Coast Guard and Rhode Island National Guard; and included 4,358 military personnel.
The report noted that 11,469 civilian workers were employed by the Defense Cluster in 2016.
Workers employed by the Defense Cluster received $1.35 billion in 2016.
“The Defense Cluster significantly impacts our state’s economy with high-wage job creation, economic output and tax revenue,” Gov. Gina M. Raimondo said in a statement. “It’s critical that we continue to foster the innovation and growth of this cluster for our current and future workforces as it is the highest-paying sector in the state.”
SENEDIA’s workforce analysis rated the Defense Cluster as the highest-paying sector in Rhode Island, including an average salary of $101,400 for a defense civilian employee at the Naval Undersea Warfare Center Division Newport, an average of $91,700 for all Department of Defense civilian employees and an average of $70,200 for private defense industry employees.
The next highest-paying sector in the state was professional and business services with an average of $56,100 per year.
NUWC Newport data:
Fifty-four percent of all contracts were awarded to Rhode Island contractors in 2016, a decline of 4.6 percentage points year over year. However, total contracts increased by $24 million from 2015 to $487 million. Rhode Island contractors were awarded $262 million of those contracts.
Chris Bergenheim is the PBN web editor.
