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Military spending in Louisiana has $9.64 billion economic impact

Christian Fernsby |
Military related spending in Louisiana creates $9.64 billion in annual economic impact across all regions of the state, according to a study commissioned by the State of Louisiana.

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Economic activity associated with that spending results in more than 77,000 jobs and pays $348.7 million in state and local taxes, the study showed.

In terms of payroll employment, the military accounts for 3.75 percent of Louisiana jobs about one out of every 26 jobs in the state. The economic impact of military spending in Louisiana makes up 2.4 percent of the state’s gross domestic product.

The $9.64 billion total represents a 25 percent increase in statewide economic impact which calculated the impact of military related spending in Louisiana to be $7.7 billionr.

“From the Battle of New Orleans to LSU’s founding as a military school to the modern day contributions of Fort Polk, Barksdale Air Force Base and other stalwart facilities, the Armed Forces have loomed large throughout Louisiana’s history,” Gov. John Bel Edwards said.

“Every region of Louisiana benefits economically from the payroll, spending, contracted work and other activity arising from the military’s presence in our state.

"We extend our thanks to the servicemen and servicewomen on active duty, our skilled workforce involved in defense contract activity and the military retirees and veterans of our state, for the contributions they have made and will continue to make.”

The report, prepared by Business Development Advisors for the 2020 fiscal year, evaluates expenditures at Louisiana military facilities; Department of Defense and Coast Guard contracts performed in Louisiana; and pay to military retirees in the state. The study was commissioned by Louisiana Economic Development and the Louisiana Military Advisory Council. State law mandates an in-depth assessment of the military’s impact in Louisiana every four years.

“As this new impact study shows, the military installations in Louisiana are significant economic drivers for our state,” Louisiana Economic Development Secretary Don Pierson said.

“Their affiliated advocacy groups also play a vital role, working on behalf of military facilities as well as military personnel and their dependents. Louisiana’s contribution to protecting our nation’s freedom secures important economic benefits for the Louisiana economy. LED is proud to play an important role in supporting our defense installations and our service men and women.”

Total military contract spending in Louisiana for 2020 was $2.48 billion, continuing a recent growth trend. Military contract spending in Louisiana has increased in each of the past seven years, and 2020’s total represents a 132 percent increase in military contract spending from 2013.

This spending includes contracts for the Coast Guard but excludes civil works and engineering services of the Army Corps of Engineers.

Shipbuilding and repairing remains the leading defense industry sector in Louisiana, accounting for $971 million in contract work in 2020, more than 39 percent of all defense contract spending in the state. Other heavy and civil engineering construction accounted for $576.9 million, more than 23 percent of the state’s contract work.

Other leading defense sectors in Louisiana in 2020 were engineering services ($96.5 million, 3.9 percent), deep sea freight transportation ($87.8 million, 3.5 percent) and coastal and Great Lakes freight transportation ($86.7 million, 3.5 percent).

The top three Louisiana defense contractors in 2020, based on contract value, were Textron ($510.8 million, 20.6 percent); Weeks Marine ($304.7 million, 12.3 percent); and Bollinger Shipyards Lockport ($253.8 million, 10.2 percent).

Other leading defense contractors included Gulf Island Shipyards, Hornbeck Offshore Operators, James Construction Group, Placid Refining Co., Tiya Services, Swiftships and Gravois Aluminum Boats.

Louisiana had more than 26,500 military retirees who received annual gross pay totaling $684 million; this income turns over in the state economy through the tax base, living expenses and personal spending.

Spending by Louisiana veterans other than retirees is not considered military spending and is not included in the economic impact. Veteran expenditures were approximately $3 billion in 2019 for almost 277,000 veterans living in Louisiana.

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