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"Army Strong" and Economics

Straddling the Tennessee-Kentucky border, approximately 50 miles northwest of Nashville, sits the United States Army installation, Fort Campbell. The military post occupies about 106,700 acres between the towns of Clarksville, Tennessee, and Hopkinsville, Kentucky.

Ties between the base and the regional community run deep. While spending time in the area, it is hard to miss the patriotic messages in storefront windows, the flags, and the signs supporting the troops who call Fort Campbell home. The fort is of vital importance to the area's pride and economy. Federal Reserve Bank of Atlanta President, Dennis Lockhart, along with the Nashville Branch board of directors, recently had the opportunity to tour the base and see firsthand how important a large military installation can be to a community's welfare.

Atlanta Fed President and the Nashville Branch Board

Fort Campbell is home to the "Screaming Eagles" of the 101st Airborne, the Army's only air assault division and one of the most deployed divisions in the military. Other major units housed at the base include the 5th Special Forces Group, the 160th Special Operations Aviation Regiment, the 52nd Ordinance Group, the U.S. Army Medical Command, Installation Management Command, and Network Enterprise Technology Command. The base boasts the second-largest Army airfield in the continental United States and also has its own railyard, capable of processing 240 railcars.

Fort Campbell operates like a city, with nine schools on the base, several child development centers, a hospital, a movie theater, golf course, restaurants, and even a dog park. According to a 2012 study by the Christian County Chamber of Commerce in Kentucky, the base directly supports nearly a quarter of a million people, including 30,179 active military personnel, 53,116 family members, 151,308 military retirees and their family members, and 9,099 civilian employees.

Through these people, the base is able to contribute to the local economy in a variety of ways. The housing market receives a significant boost, as a high number of soldiers and their family members live off base. They pay local taxes and patronize local businesses, and their children attend local schools. Also, the more than 150,000 retired military personnel and their family members probably wouldn't be living in the community if not for Fort Campbell. A significant number of them also contribute to the local economy in the same way as the active soldiers.

That being said, the annual economic impact in dollars includes $1.8 billion in solider pay, $1.4 billion in retiree pay, $295 million in civilian pay, $386 million in construction expenses, and $219 million in housing allowances.

So, as one would expect, when a large number of soldiers at Fort Campbell are deployed, the local economy feels the sting. Without Fort Campbell and its people, the Clarksville/Hopkinsville metropolitan statistical area would be a shell of itself. If the base suddenly moved from the area, some 80,000 soldiers and family members would be stationed elsewhere. Construction projects would come to a halt. City and county tax revenues would plummet. Everything from restaurants, car washes, and grocery stores would dry up.

The men and women serving our country protect us and keep our nation safe, but they do much more than that. They drive and support local economies. They improve our way of life in ways that go unseen. Economics aside, we say thank you!

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed´s Nashville Branch

June 11, 2014 in Manufacturing | Permalink


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