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Funding awarded to Massachusetts companies through federal defense contracts has nearly tripled since 2001, to $15.6 billion last year, according to a report released Monday by the Associated Industries of Massachusetts.
The state ranks fifth in the nation in the value of contracts awarded by the Department of Defense and seventh when it comes to Department of Homeland Security contract awards, according to the study conducted by the University of Massachusetts Donahue Institute.
“The defense industry is the hidden vital sector of the Massachusetts economy,” said Richard Lord, president and CEO of AIM, in an announcement about the report. “During the current economic downturn, which has impacted many sectors of the Massachusetts economy, defense has been a strong and stable contributor to Massachusetts’ economic growth and continues to create highly skilled, high-paying jobs.”
The federal defense contracts have supported work in research and development, sophisticated manufacturing and highly specialized technical and professional services, according to the report.
The state’s largest defense contractor, Waltham-based Raytheon Co. (Nasdaq: RTN), is one of the state’s top employers and is the largest Massachusetts-based company by revenue. The company expects 2010 revenue to reach up to $25.6 billion.
The $15.6 billion in federal defense contracts awarded to Massachusetts firms last year translated into $26 billion in total economic activity in the state, and supported 115,563 jobs, the report found.
In 2001, the value of defense contracts awarded to Massachusetts firms was $5.5 billion, and translated into $10.6 billion in total economic activity, according to the report.
The defense industry accounts for 85 percent of all federal contracts awarded to Massachusetts, the report found.
The state has also seen a 63 percent increase in contract values awarded for Small Business Innovation Research since 2005, according to the report.
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