Report: Defense industry an economic heavyweight in Utah

SALT LAKE CITY — At a time of relative peace and with fewer than 1% of Americans serving active duty in the military, it's easy to forget the economic impact of the defense industry — particularly in Utah.

But in 2023, the defense industry directly and indirectly supported over 173,000 Utah jobs — about the size of the state's construction industry — and contributed an estimated $22.2 billion to the state's gross domestic product, according to a report released this week by the Kem C. Gardner Policy Institute.

"Utah continues to host many national defense businesses and military installations that provide vital contributions to our national security," said Kevin Sullivan, executive director and chief operating officer of the Utah Defense Alliance Board.

Such contributions cast a wide net across Utah's diverse economy, according to Levi Pace, the report's lead author and a senior economist at the University of Utah's Gardner Institute.

"This industry is unique because almost 100% of its funding comes from out of state," Pace told the Deseret News.

"When I think of the military and the defense industry, I'm usually thinking about active duty personnel and our National Guard service members, who carry a heavy load. But it's also a lot of civilian and contractor jobs. That's where we've seen some of the higher-paying jobs or higher growth, which supports our military preparedness and service members."

The Gardner report revealed several key economic findings from fiscal year 2023:

• Employment — Utah's defense industry directly provided 49,540 military and civilian jobs — 2% of the state's employment.
• Income — Utah's federal defense workforce earned over $3.5 billion in compensation in 2023, representing 2.5% of the statewide total. Compensation for federal defense jobs in Utah averaged $102,115 — about one-third more than the state's average ($77,801) paid by all other jobs.
• Contracts — Of Utah's total of $5.9 billion total in defense contracts in 2023, $5.2 billion (almost 90%) went to 10 contractors — including Northrop Grumman, with $3.5 billion.
• Job impact — The defense industry directly and indirectly supported over 173,000 full- and part-time jobs — mostly related to Hill Air Force Base, federal support for Utah veterans, defense contracts and grants, and the Utah National Guard.
• GDP impact — Utah's defense industry directly or indirectly contributed an estimated $22.2 billion in GDP. That's 7.8% of the statewide total for all industries.
• Fiscal impacts — Defense-related activity in Utah generated net fiscal impacts of $431.3 million for the state government, based on estimated revenues of $841.5 million versus expenditures of $410.2 million.

Hill AFB's deep economic reach

It's difficult to overstate the primacy of Hill Air Force Base in Utah's defense industry.

Stretching across Davis and Weber counties, it's the state's premier military installation in terms of budget, staffing, land area and technology, according to the report.

"Hill Air Force Base has been the anchor of the defense industry in Utah for decades," said Pace. "More than half of the (state's) federal jobs in defense are at Hill AFB.

"Much of the burgeoning aerospace industry — planes, missiles, drones — along with cybersecurity and communications all revolve around Hill AFB," Pace said.

In 2023, Hill AFB employed 4,853 active duty military personnel, 1,067 Air Force reservists — and a whopping 14,787 federal civilian employees. That's almost 10% of the total employment in Davis County.

Additionally, Hill AFB remains a major draw for government contractors. More than 6,200 employers of government contractors from the private sector worked on the base in 2023, according to the Gardner report.

"We're kind of an Air Force state," said Pace.

Besides Hill AFB, the Gardner report identified several other "major defense components" contributing to Utah's economy — including Dugway Proving Grounds, Tooele Army Depot, and the Utah National Guard.

Meanwhile, federal support for veterans and retired defense department civilians impacts local and state economies in several ways — including Veterans Affairs health clinics and military pensions.

In 2023, Utah companies, military installations and other institutions were awarded over $6 billion in federal defense contracts and grants, according to the report.

Some of the top defense contractors in Utah included Northrop Grumman, L3Harris Technologies, Utah State University and Advantaged Solutions.

Looking ahead: Defense and Utah's economy and jobs

Federal employment in the defense sector has been "very stable" in recent years — and Pace expects that to continue.

"Where I would expect to see more growth and innovation," he said, "would be in the contracting of aerospace and different kinds of technologies around our defense and military preparedness."

Pace also noted that the defense industry typically boasts above-average pay.

"The military is hiring people in virtually every occupation that you might see in the private sector," he said. "Many of those jobs are from advanced STEM or really creative-type jobs. So there's a lot of (job) potential for contractors and on bases, as well."

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