A 317 percent increase in federal procurement spending between 1990 and 2004 spurred much ofthe Washington region’s intense economic growth and put it on top in many key industries, according to the Greater Washington Initiative’s annual report, released Thursday.
But depending on federal contracting to sustain the economy could hurt the area if the Department of Defense, the government’s biggest spender, sees budget cuts in the coming years.
In 1990, the federal government spent $12.6 billion of its federal procurement budget in Greater Washington. That figure rose to $52.6 billion of the $350 billion annual procurement budget in 2004.
The spending increase spurred the growth of federal contracting firms in the area, and today the region leads the nation in engineering, technology and life sciences employment. Within the past five years, the Washington region added more than 270,000 jobs — more than any other major U.S. city.
The region also outpaced other major metropolitan areas in the number of bachelor’s and graduate degrees and has the highest median household income, above cities such as San Francisco and New York.
“It’s quite rosy no matter what color glasses you’re wearing,” said William Couper, chairman of the Greater Washington Initiative.
But while the region outpaces other metro areas in many key economic indicators, area firms that focus on federal contracting should diversify with private-sector clients, said Booz Allen Hamilton Managing Director Dennis O. Doughty, who spoke on a Greater Washington Initiative panel Thursday.
“There will be some impact from a decline in federal spending,” he said.
“The global war on terror is the No. 1 priority for the Department of Defense and will be for decades ahead,” said James Finley, deputy undersecretary of the department. But he warned the department will be “squeezed” in the next couple of years.
“The government has been spending money like they print it,” Stephen Fuller,director of the George Mason University’s Center for Regional Analysis, told The Examiner in a previous interview. But that spending is likely to be curtailed in the future, he said.
How does Washington rank?
Population
» New York: 18.77 million
» Los Angeles: 13.1 million
» Chicago: 9.43 million
» Greater Washington: 6.02 million
» Philadelphia: 5.82 million
Gross Regional Product
» New York: $973.3 billion
» Los Angeles: $634.1 billion
» Chicago: $422.9 billion
» Greater Washington: $342.4 billion
Median Household Income
» Washington region: $72,799
» San Francisco: $71,201
» Boston: $63,958
» Atlanta: $59,127
» Chicago: $58,296
Education
» Greater Washington: bachelor’s degree: 42.5 percent, graduate degree: 19 percent
» San Francisco: bachelor’s degree: 37.3 percent, graduate degree: 14.1 percent
» Boston: bachelor’s degree: 34.4 percent, graduate degree: 13.9 percent
» New York: bachelor’s degree: 30.5 percent, graduate degree: 12.6 percent
» Atlanta: bachelor’s degree: 32.1 percent, graduate degree: 10.4 percent
LEADING THE WAY
The Washington region leads the nation in employment in several highly skilled sectors:
Science and engineering
» Greater Washington has 324,530 science and engineering workers, ahead of Chicago (203,090), Los Angeles (186,300) and New York (179,120).
Computers and mathematics
» Greater Washington has 194,980 computer and mathematics workers, ahead of Chicago (109,680), New York (102,750) and Boston (84,070).
Life and physical sciences
» Greater Washington has 32,150 life and science workers, ahead of Boston (17,890), Philadelphia (16,540) and Los Angeles (14,330).
Five-year employment growth
» Washington added 270,800 jobs in the past five years. Miami added 208,400 and Atlanta added 47,900. New York, Chicago, Boston and San Francisco all had net losses.
