Value of Mass. defense contracts triples in decade
The defense industry generated $26 billion in economic activity in Massachusetts last year, supporting more than 100,000 jobs and accounting for 85 percent of all federal contracts awarded in the state, according to a study released yesterday.
The report — from the University of Massachusetts’ Donahue Institute and funded by defense contractor Raytheon Co. — found that defense contracts awarded in the state have nearly tripled over the past 10 years, to $15.6 billion in 2009 from $5.5 billion in 2000.
Only four other states — Virginia, California, Texas, and Maryland — received more in defense contracts than Massachusetts did last year.
“As the defense sector continues to increase, so too has its importance to the state,’’ the report said. “During a time of serious economic downturn in many areas of the economy, defense has provided stability and reliability while other sectors have faltered.’’
The study was based on federal contracting data and economic analyses that estimate so-called multiplier effects of the spending as it works its way through the economy, generating wages, subcontracts, support services, and — ultimately — jobs. For example, wages paid to defense industry workers are then spent on products and services, which support other businesses and their employees.
The study concludes the defense sector is well positioned to capture a significant share of spending as the Pentagon increases its focus on developing new technologies, a Massachusetts specialty. The report also shows the growing role of services in the local economy.
Professional, scientific, and technical services, which include a variety of firms, captured more than 40 percent of defense spending in the state in 2009, up from less than 30 percent 2005. During the same period, manufacturing’s share of defense contracts slipped to 38 percent from 41 percent.
The study estimated that defense contracts generated about $14 billion in direct economic activity in 2009, and another $12 billion as that money filtered through the economy.
Nearly 50,000 jobs in the state are directly dependent on defense contracts, and more than 65,000 other jobs are supported by the economic activity those contracts generate, according to the study .
In 2009, the industry generated more than $1 billion in state taxes, up from $400 million in 2001.
Robert Gavin can be reached at rgavin@globe.com. 
