Defense budget could be good news for Connecticut

There may be good news for Connecticut in the administration's proposed fiscal year 2018 budget: the called-for increase in defense spending might mean a share for the state’s defense industry.

Recently, the Senate backed nearly $700 billion in proposed military spending overall, with the House earmarking slightly more for the budget.

What with shipyards, helicopter manufacturers and aircraft engine makers leading the pack of defense and aerospace related industries in the state, it would be hard not to benefit from federal defense priorities. The budget includes billions of dollars to build major military craft in Connecticut.

Of course, however, there is congressional approval to take into account. The budget is not set in stone. And there certainly is no guarantee that the requested defense spending will actually be included in whatever congressional compromise may evolve. But it can be cautiously concluded that at least some increase in defense spending lies in the future.

While it is anticipated that the large defense companies will benefit from the influx of defense spending, it isn’t likely to stop there. Connecticut has long had a network of smaller defense and aerospace firms that benefit from additional work sent their way by the large firms.

With more than 1,000 suppliers across the state, and that number expected to increase as large manufacturers look to expand their supplier base, the number of companies that will benefit from this influx of opportunity will also increase. To build additional submarines, for instance, one large manufacturer has already hired 1,000 workers this year to date; the company’s long-term goal is a hire of 14,000 to 20,000 workers in the next dozen years.

It is expected that along with the influx of new workers to the state will be a rise in home sales and new construction. Already, near the submarine manufacturing site, apartment buildings, town house complexes and commercial construction is in the offing.

I believe that the long-term investment that is necessary across the spectrum of the defense industry, as exemplified by hiring projections stretching across at least a decade, will certainly provide ample opportunities for investors who study the sector and invest accordingly.

President Trump has placed the defense of the nation at the top of his priority list for the remainder of his time in office, which may provide a good indication of investment opportunity. But thorough planning is required before turning a foundation into a fully constructed financial strategy.