Tags: Defense | Cuts | DC | Economy | slow

Defense Cuts Could Slow D.C. Economy for Years

By    |   Monday, 13 Sep 2010 07:56 AM

Planned cuts in defense spending will put a major dent into Washington, D.C.’s economy.

Experts told The Washington Post that the effect could last for years.

Already this year, Lockheed Martin, ITT Defense and Information Systems and Northrop Grumman have axed more than 1,800 workers in total.

"As the defense budget shrinks, it will be impossible for the companies here to escape unscathed," Loren Thompson, chief operating officer of the Lexington Institute and a consultant to several major defense contractors, told The Post.

"There will be many thousands of layoffs in the greater Washington area."

In August, Defense Secretary Robert Gates recommended cutting spending on "support contractors" by 10 percent in each of the next three years. That will create a direct hit on the Washington area, which supplies many staffers for defense-related professional, administrative and computer services.

Federal spending now represents about 37 percent of the capital region’s economy, up from 33 percent in 2000, John McClain, deputy director of the Center for Regional Analysis at George Mason University, told The Post.

Defense stocks aren’t looking so hot either.

The S&P Aerospace & Defense index is flat so far this year and down 29 percent from its record high of October 2007.

"There's no doubt that (shares have) come down, there's no doubt that they're trading at trough levels," Alex Hamilton, managing director of EarlyBirdCapital told Reuters.

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Planned cuts in defense spending will put a major dent into Washington, D.C. s economy. Experts told The Washington Post that the effect could last for years. Already this year, Lockheed Martin, ITT Defense and Information Systems and Northrop Grumman have axed more than...
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2010-56-13
Monday, 13 Sep 2010 07:56 AM
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