Long-Term Outlook Uncertain for Hampton Roads Contractors
An infusion of funds for DOD’s operations account courtesy of the full-year fiscal 2013 defense spending bill Congress passed in March has granted the Hampton Roads, Va., region a reprieve from many of the overhaul and other ship maintenance projects the Navy earlier had suspended.
But sequestration, which could slash the defense budget by almost $500 billion through FY 2021, is still lurking and defense contractors in the area remain anxious about the future, reports the Virginian-Pilot.
The Pentagon’s $41 billion sequester cut in FY 2013 may result in the loss of only 1,655 jobs in Hampton Roads this year, but over the long term the consequences are expected to be significant.
“This is going to be a pretty gradual process,” said James Koch, an Old Dominion University economist. “Absent some international crisis that would push defense spending up, we’re going to see things just gradually ease away from, you know, where we are right now.”
Now many contractors in southeastern Virginia are looking to diversify their businesses.