Increased defense spending will add nearly 20,000 San Diego jobs this year, the report says

Increased defense spending in San Diego contributed to nearly 20,000 more jobs in San Diego by 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 civilian contractors. Total defense spending in San Diego increased more than 12%, according to the report.

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

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

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

Defense spending increased by 12.2% over 2023, which is far higher than inflation, the report says.

Local military and political leaders were at Naval Base Point Loma Annex on Wednesday to release the report.

Rep. Sara Jacobs, D-San Diego, said she was encouraged that the report highlighted San Diego’s innovation and startup companies and that more is on the way as new technologies find their way into the military.

“San Diego is really at the forefront of innovation in the defense sector, and I think that’s only going to become more and more important,” Jacobs said.

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

Michael Meyer, 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 normal pattern 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 shows once again that the defense budget is the largest economic driver in the region,” Boone said.

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

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

Balmert died on September 13. He lived to be 70 years old.