MCLEAN, Va., Aug. 16, 2004 (PRIMEZONE) -- Dr. Stephen S. Fuller, generally regarded as the authoritative source for understanding the growth of the Greater Washington Region, is asserting that this region is "different." Fuller, who is Director of the Center for Regional Analysis at George Mason University's School of Public Policy, says that difference arises in large part from the long-term and continuing growth in federal contract spending in this region, as reported in a research report issued today that he authored with Delta Associates, a real estate research and consulting group. According to Fuller's analysis, federal procurement spending in the Washington Metropolitan area reached $42.2 billion in FY 2003, a 16.9 percent, or $6.1 billion, increase over the previous year. The gain is a record both in absolute dollars and pace of growth. The report, funded by First Horizon Bank, is the first look at recently available procurement data and its impact on the Washington-area economy.
"Despite the strength of the growth, it would be wrong to characterize it as a 'boom,'" Fuller said. "A boom is a spike in growth that may last for one or more years, but is followed by a period of return to normalcy or more likely slow growth. Here, we have had continuous growth for many years now, and although the growth in some years is stronger than in others, such as with the 2003 growth, there has been no dramatic spike. It is hard to find another economy in the world that matches what is happening here; it is difficult to find other economies like this looking through history."
Key findings of "FY 2003 Federal Procurement Spending and Its Impact on The Washington Area Economy in 2004 and Beyond" include:
- 15 percent of federal procurement outlays nationwide take place in the Washington metro area, up 4 percent in 1980. Given the nature of the government procurement needs and the unique capabilities of the region's contactors, it is extremely likely that the region will continue to capture an even larger share of the national federal procurement market.
- The increase of $6.1 billion in procurement in FY 2003 explains why the region held up under economic pressures, while other metro areas struggled. The procurement increase generated the need for 42,500 net new jobs in the region, or approximately half the net new jobs in the region.
- $42.2 billion in procurement supports 294,000 private sector contractor jobs. This spending indirectly supports more than 600,000 other jobs in the Washington region as a result of what economists call a "multiplier effect."
- 31,000 of the total 82,000 new jobs created in the 12 months ending in June 2004 were in Professional and Business Services in the region. This continues to support the pattern of procurement spending for service - 75 percent of the total in FY 2003.
- Not all parts of the metro area benefit equally from the federal procurement activity. 76 percent of the $6.1 billion increase was captured by Northern Virginia. Fairfax County, with $13.6 billion in procurement in FY 2003, enjoyed higher levels of procurement activity than suburban Maryland or the District of Columbia.
- Spending by the Department of Defense increased the most in FY 2003 - up $2.6 billion from last year, totaling $18.5 billion in procurement (44 percent of the total).
"Federal procurement spending has always been important to the growth and vitality of the area's economy, but the surge in spending since 9/11 has created a rate and quality of growth that differentiates the Greater Washington region from all others in the nation and is having an impact on every aspect of the region's culture," said Fuller.
Fuller and Greg Leisch of Delta Associates (www.deltaassociates.com) will be joined by a number of community and business leaders to discuss the procurement study at a roundtable briefing today at the National Press Club. One of those participating in the discussion will be Terrie G. Spiro, regional president of First Horizon Bank, which sponsored the report. "I've been in the banking business here for more than 20 years, serving with small local banks and major regional banks," Spiro said. "The region's track record for growth made it the first choice for the expansion of our parent company outside the Tennessee banking market. Our growth here has validated that. This report validates it even more. We are confident this type and quality of research will be of significant value for local governments, community organizations and businesses as they consider their own planning and marketing needs."
At the briefing, after Fuller reviews the findings of his report, he will facilitate discussion on the regional economic dynamics - historic procurement trends, importance of federal spending to the area's economic health and sub-state regions, continued strong job growth performance, consolidation of federal procurement spending, and increases in government spending such as homeland defense, IT and telecommunications.
About First Horizon
First Horizon is part of First Horizon National Corp. (NYSE: FHN), headquartered in Memphis, Tenn., which is the 30th largest bank holding company in the United States, with $27.3 billion in assets. The 12,000 employees of First Horizon National Corp. provide financial services to individual and business customers through hundreds of offices located in more than 40 states. The corporation's three major brands -- FTN Financial, First Horizon, and First Tennessee -- provide customers with a broad range of products and services including:
- Capital Markets, one of the nation's top underwriters of U.S. government agency securities
- Mortgage Banking, with one of the nation's top 15 mortgage originators and servicers, which earned a top-10 ranking in customer satisfaction from J.D. Power and Associates
- Retail/Commercial Banking, with the largest market share in Tennessee and has earned one of the highest customer retention rates of any bank in the country
FHN companies have been recognized as some of the nation's best employers by AARP, Working Mother, Business Week and Fortune magazines. FHN also was named one of the nation's 100 best corporate citizens by Business Ethics magazine. More information can be found at www.FirstHorizon.com.
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