Increased defense spending adds almost 20,000 San Diego jobs this year, report says

Increased defense spending in San Diego contributed to almost 20,000 more jobs in San Diego in fiscal year 2024, according to a new report from the UC San Diego Rady School of Management.

A few thousand of those new jobs are active duty military positions but most of them — about 16,000 — are civilians employed by contractors. Total defense spending in San Diego was up more than 12%, according to the report.

The San Diego Military Economic Impact Report annually tracks how government defense spending — from the U.S. Defense Department and the Department of Veterans Affairs — impacts the local economy. It’s sponsored by the San Diego Military Advisory Council (SDMAC), a nonprofit that promotes the economic side of San Diego’s military footprint.

To calculate that, researchers say that for every $1 the government spends contributes up to $1.56 to the economy. This creates a “multiplier effect” that’s used to determine overall impact.

That means the $40.5 billion in direct government spending contributed more than $63 billion to the local economy, the report says. That’s almost 25% of San Diego’s total gross regional product.

Defense spending was up 12.2% over 2023, well outpacing inflation, the report says.

Local military and political leaders were at the Naval Base Point Loma Annex Wednesday for the report’s release.

Rep. Sara Jacobs, D-San Diego, said she was encouraged the report highlighted San Diego’s innovation and start-up companies and that there’s more to come as emerging technologies find their roles in the military.

“San Diego is really at the forefront of innovation in the defense sector, and I think it’s only becoming increasingly more important,” Jacobs said.

Companies working with artificial intelligence and unmanned vehicle technology accounted for most of that spending, the report says.

Michael Meyer, a professor at UC San Diego, led the research team behind the report. He said 2024 represented a return to normal after years of pandemic-related emergency spending.

“This represents a solid return to a pattern of normal for us,” Meyer said.

David Boone, a retired rear admiral, is the new president and CEO of SDMAC. He said the report shows how important the military is to San Diego.

“(SDMAC) began producing these reports to independently document the military’s significant economic impact on the San Diego region, and this year’s report once again shows the defense budget’s impact is the largest economic driver of the region,” Boone said.

He replaced retired Rear Adm. Mark Balmert when he stepped down earlier this year. Balmert led SDMAC for more than six years.

Balmert served more than 30 years in the Navy, time that included commanding Expeditionary Strike Group 3, Destroyer Squadron 7 and the guided-missile destroyer Chandler.

Balmert died Sept. 13. He was 70 years old.