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Navy's economic impact on Hampton Roads region continues to grow, according to report

The Arleigh Burke-class guided-missile destroyer USS Gonzalez (DDG 66) departs Naval Station Norfolk on Sept. 10, 2018.

RYRE ARCIAGA/U.S. NAVY PHOTO

By COURTNEY MABEUS | The Virginian-Pilot | Published: November 15, 2018

NORFOLK, Va. (Tribune News Service) — The Navy's economic impact in Hampton Roads grew by nearly $600 million for the fiscal year that ended Sept. 30, 2017, and for the third year in a row surpassed the $10 billion mark, according to a report released Wednesday by Navy Region Mid-Atlantic.

The latest report shows the direct impact for fiscal 2017 was $13.4 billion, and includes an increase of more than 5,600 active duty personnel, up to 87,787 from 82,172 in fiscal 2016. Region spokeswoman Beth Baker said those personnel increases include military students and Marines at Joint Expeditionary Base Little Creek-Fort Story.

The report compiles the infusion of money in the region's economy from salaries, expenditures and contractual payments for services that support the region's bases.

This year's increase is less than fiscal 2016, when the region reported $2 billion in growth, but that year also included the addition of the aircraft carrier USS Gerald R. Ford's to the fleet. The number of homeported ships increased again in fiscal 2017; the Los Angeles-class attack submarine USS San Francisco moved from San Diego to Norfolk Naval Shipyard in late 2016 and is undergoing conversion into a training facility, Baker said.

Even though the financial impact may be less than in the previous fiscal year, Craig Quigley, executive director of the Hampton Roads Military and Federal Facilities Alliance, pointed out that the increase is proof of the "central role" that the Navy plays in the region's economy and also shows the value that the service see in the region.

"This is a not a sharp uptick but it is a good, positive upward trend line and we all want to be very mindful, again, of the tremendous economic impact that the Navy presence has on Hampton Roads," Quigley, a retired rear admiral, said Wednesday.

Military personnel and their families, which includes all active duty, reservists, retirees and family members, also continued on an upward trend, from 251,361 to 267,121. At the same time, annual payroll from military and civilian workers increased to $11.3 billion, up from $10.6 billion.

The report showed a decrease in civilian employees, from 49,961 to 48,695, but that figure includes an increase in contractors, from 13,991 to 14,201.

Spending on goods and services – which includes contracts for ship building and repairs in the area's private yards as well as other military construction, maintenance, repair and transportation – showed a decrease from $2 billion to about $1.9 billion.

Quigley said he expects the region to see continued boosts in coming years because of increased defense spending under the Trump administration, as well as plans to grow the Navy's fleet to 355 ships. The $716 billion defense spending bill for fiscal 2019 includes billions for shipbuilding, repair and shore construction. Quigley said he already sees momentum.

"Just take a look at all the various private ship repair yards in Portsmouth and Norfolk," Quigley said. "I have never seen so many ships undergoing maintenance at one time."

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