New York State is the 16th largest recipient of U.S. defense spending among all 50 states and the District of Columbia. In FY 2018, the most recent fiscal year for which data is available, NYS accounted for 2.1% of total U.S. defense outlays. If those numbers are lower than what you expected, consider that the leading recipient of defense spending, the Commonwealth of Virginia, accounts for 11.2% of total defense expenditures and is home to the Pentagon and the Defense Advanced Research Projects Agency (DARPA).
In New York State, more defense dollars are dedicated to manufacturing than to research. In FY 2018, contracts for supplies and equipment were nearly three-quarters (72%) of total defense spending. By contrast, research and development was only 8% of the total. The remaining DoD contracts awarded to NYS companies were for construction (2%) and other services (18%). The value of all NYS defense contracts totaled $10.4 B in FY 2018. This consisted of $7.7 B in contract spending and $2.7 B in payroll.
Top Defense Contractors
This table lists the top 10 defense contractors in New York State with their total contract amounts (FY 2018). Most are prime contractors and, with only a few exceptions, part of the manufacturing sector.
|Lockheed Martin||$1.2 B|
|Harris Corp.||$1.1 B|
|Northrup Grumman||$361.0 M|
|BAE Systems||$293.3 M|
|Interpublic Group of Companies||$253.3 M|
|L3 Technologies||$127.7 M|
|St. Vincent’s Catholic Medical Centers of NY||$106.7 M|
Source: U.S. Department of Defense Office of Economic Adjustment
Many of these prime contractors use NYS subcontractors. Primes from other states also subcontract work to NYS companies. The Tier 1 firms in this list include some well-known names, but New York State’s defense supply chain also includes many Tier 2 and Tier 3 companies. Other industries, such as engineering and professional services, also benefit from DoD-related contract spending.
Top Industry Sectors
In terms of employment, the impact of defense spending in New York State is significant, especially when direct, indirect, and induced employment is considered.
- Direct jobs are created by the holder of the DoD contract.
- Indirect jobs are created when a defense contractor buys from another company.
- Induced jobs are created when employees of the defense contractor spend their earnings, such as at stores or restaurants.
The table below lists the top 10 manufacturing sectors for NYS defense contracting and the total employment (direct, indirect, and induced) for each.
|Aerospace Product and Parts Manufacturing||7,136|
|Navigational, Measuring, Electromedical, and Control Instruments Manufacturing||4,673|
|Communications Equipment Manufacturing||2,627|
|Architectural, Engineering, and Related Services||2,362|
|Scientific Research and Development Services||2,153|
|Other Fabricated Metal Product Manufacturing||1,081|
|Semiconductor and Other Electronic Component Manufacturing||781|
|Ship and Boat Building||631|
|Computer Systems Design and Related Services||577|
|Apparel Accessories and Other Apparel Manufacturing||499|
Source: Chmura Economics and Analytics
Top Defense Contract Spending Locations
Manufacturers in each of New York State’s 10 regions benefit from DoD spending. The tables below rank these regions by the total value of their defense contracts for FY 2017, the last year for which this data was available by region.
|Long Island||$1,757 M|
|Finger Lakes||$886 M|
|Southern Tier||$853 M|
|Central New York||$777 M|
|New York City||$775 M|
|Western New York||$416 M|
|Mohawk Valley||$193 M|
|Capital District||$164 M|
|North Country||$126 M|
Source: Chmura Economics and Analytics
Opportunities, Challenges, and Assistance
The DoD needs America’s defense industrial base (DIB) to do more than support current military systems and sustain legacy platforms. Today, there are nine major areas where DoD wants the DIB to develop and supply emerging technologies at scale.
- Directed energy weapons
- Artificial intelligence (AI)/machine learning
- Quantum science
- Fully networked command control and communications
- Autonomous systems
For NYS defense contractors who work in these and other areas, business and technical assistance is available. FuzeHub, the statewide Manufacturing Extension Partnership (MEP) center for New York, can connect you to resources such as the state’s 10 regional MEPs, Centers for Advanced Technology (CAT), and Centers for Excellence (COE). We can also connect you to resources that can assist with the Cybersecurity Maturity Model Certification (CMMC), an emerging cybersecurity standard.
To get started, request a consultation with FuzeHub.