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Sequestration could cost Arizona defense contractors

PHOENIX — The Greater Phoenix Economic Council has issued its study on the potential impacts of Congress and the White House failing to stop the so-called sequestration of massive federal budget cuts from taking effect Friday.

Barry Broome with GPEC said he doesn’t intend for this to be a doomsday report but the impact will be significant. There are almost 50,000 jobs tied to aerospace and defense in Arizona which has the nation’s sixth-largest share of Department of Defense contracts.

Broome estimates the state could lose $2.3 billion dollars each year, but until the sequestration actually happens, the size and effect of the cuts remains ambiguous.

“We get $13 billion in defense contracts each year. That’s a big number to our economy,” he said, adding that the billions in contracts are spread across 2,000 companies.

Broome’s report did not estimate the number of job losses in the state if the sequestration kicks in but it will be significant.

“I think Boeing in Mesa is in pretty good shape,” he said. “Honeywell has done a great job in diversification, but I am more nervous about Raytheon in Tucson more than any asset in the state.”


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