Economic impact of Savannah River Site tops $2 billion

Savannah River Site’s annual economic impact on the Augusta area has been newly measured at about $2.4 billion.

 

That’s just one of the many findings of a study released Monday by a nonprofit striving to help prepare for growth and to develop economic diversity in a five-county region that includes SRS and most of its workers.

“There are a lot of nuggets” of information in the study, said Rick McLeod, “the president and CEO of the SRS Community Reuse Organization. “Different people from different sectors will take away different pieces of information. It depends on your perspective when you look at it.”

The study was prepared by the economic development consulting firm TIP Strategies, which worked with Simon Medcalfe, an associate professor of finance at Augusta University’s James M. Hull College of Business.

SRS and the contractors that assist in the site’s mission spent $1.2 billion in wages, benefits and other direct expenditures. That spending generated an additional $1.2 billion in economic activity, which accounts for the $2.4 billion figure. It represents 11 percent of the area’s gross regional product.

The region is defined as Richmond and Columbia counties in Georgia and Aiken, Allendale and Barnwell counties in South Carolina.

Beyond measuring economic impact, the study includes a “consequence analysis” that estimates the impact of job fluctuations on the area economy, McLeod said.

The analysis found that the projected impact of a 1,000-job loss at SRS would be a 1,700 total regional jobs lost; a loss of $127 million in labor income; and a loss of $200 million in economic output.

A 1,000-job gain would have the same magnitude of impact, but in the opposite direction – 1,700 jobs gained; $127 million more labor income; and $200 million more economic output.

“The site’s impacts go far beyond economic,” the study’s authors said in an overview. “SRS and its employees help to shape the community’s education system, housing needs, amenities and quality of place. With transitioning workforces at SRS and Fort Gordon, the region’s communities must prepare.”

The “transition” in SRS’ case means retirement. The average age of an SRS worker is 50, and “a large portion” of the site’s workforce will be eligible to retire in three to five years, the study said.

That means that to maintain current staffing levels, younger, less experienced workers would have to be hired at lower pay. That, in turn, would affect the site’s economic impact depending on how much wages drop.

Another area to prepare for is the influx of new residents resulting from Fort Gordon’s growth. It will be the home of the rapidly expanding U.S. Army Cyber Command by 2020.

Between 2,500 and 3,000 new workers associated with SRS could move to the area. The Cyber Command move is expected to create 4,700 military and civilian jobs. Including family members, that’s about 13,000 new residents – and about 2,400 will be school-age children.

“This influx of new residents will influence the regional housing markets, the public education system and the demand for community amenities,” the study said.

What’s the most important takeaway from the study?

“How important the site is as an economic engine,” McLeod said. “Not to downplay Fort Gordon, but the impact of the two coming together is what we’re trying to get folks to understand as well.”

The federal government is by far the biggest area employer. SRS is a nuclear reservation owned by the U.S. Department of Energy. Fort Gordon is a U.S. Army post.

SRS employed 8,566 residents of the five-county region in 2016 – more than 80 percent of the site’s total workforce. Fort Gordon employs about 26,000 people.

Reach Joe Hotchkiss at (706) 823-3543 or joe.hotchkiss@augustachronicle.com.

FIND OUT MORE

Read the complete study online - Savannah River Site: Economic Impact and Workforce Transition

 

More

Tue, 12/12/2017 - 19:42

Rants and raves