AEDC's economic impact exceeds $728 million

Release Number: 208191

Arnold Engineering Development Center's (AEDC) economic impact was more than $728 million during government fiscal year 2008.

This is an increase of more than $75 million and 11.5 percent from fiscal year 2007 and represents the largest dollar and percentage increase since fiscal year 2000.
The total economic impact of the $728.8 million includes the center's payroll, secondary jobs created locally through the spending of that payroll, and other expenditures for supplies, utilities, fuel and services and the spin-off impact of those purchases.

The breakdown of the total economic impact includes $697.4 million at AEDC, $11.3 million at the Hypervelocity Tunnel 9 at White Oak in Silver Spring, Md., and $19.3 million for the National Full-Scale Aerodynamics Complex at Moffett Field, Calif.

AEDC employed 2,742 people in fiscal year 2008. This number includes active-duty military personnel from the Air Force and Navy, government civilian and contractor personnel. Active-duty military members made up about 2 percent of the people at the center.

The 2,742 people employed at AEDC include 54 active-duty military members, 14 assigned military reservists, 306 full-time, part-time and temporary government civilian employees (includes 48 Non-Appropriated Fund employees) and 2,325 contractor employees plus 43 other personnel (Base Exchange, Commissary, Credit Union, small tenant organizations).

Using the Tennessee Valley Authority economic impact model methodology, it is estimated that an additional 1,892 secondary jobs were created in the local area, for a total of 4,634 jobs directly related to AEDC.

Examples of secondary jobs are those created to build new houses or jobs created in local supermarkets, car dealerships and department stores.

The payroll cost for AEDC government personnel and contractor employees was more than $247 million. Other direct expenditures were more than $248 million with the approximately $233 million in indirect spin-off impact.

Direct expenditures include money spent to pay for utilities, service contracts with outside vendors and military health insurance paid to local doctors and hospitals.

This figure does not include approximately $160 million in pay disbursed to retired military personnel in the local area. A conservative estimate is that more than $30 million is paid to government and contractor civilians who retired from AEDC and live in the local area.

The two retired pay groups generate more than $76 million in spin-off effect. When those figures are added in, AEDC's economic impact soars to more than $994 million.

The base figures do not include test customers like Pratt & Whitney and General Electric who maintain permanent staff at AEDC to manage tests of their products or other customers who spend time at AEDC during the year to take part in test activities.

This would bring the number of people working at AEDC to more than 2,800 and would increase the economic impact to almost $1 billion.

Additionally, the data does not include permanently assigned Tennessee National Guard members who operate the Guard Training facilities on base.

The economic impact data and secondary employment estimates were made using the TVA economic impact model methodology. The Air Force economic model, which uses a different, more conservative methodology, shows the center's economic impact at $576.5 million.

"We are very proud to be a part of the communities in three states and these numbers show that AEDC continues to have a significant positive impact in each locale and beyond," AEDC Commander Col. Art Huber said. "This is due to the innovative and hard work of center employees and strong support from the Arnold Community Council members, local and state leaders. Their support helps make
AEDC a vital contributor to our nation's defense."

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