EIA sees glimmer of hope in DOD electronics budget

WASHINGTON - The electronics portion of U.S. defense spending will remain at more than $50 billion annually for at least another decade, despite the continuing downward trend for the overall Defense Department budget, according to this year`s forecast by the Electronic Industries Association (EIA).

By John Rhea

WASHINGTON - The electronics portion of U.S. defense spending will remain at more than $50 billion annually for at least another decade, despite the continuing downward trend for the overall Defense Department budget, according to this year`s forecast by the Electronic Industries Association (EIA).

In fact, Emily Willey, chair of EIA`s forecast committee, calls the present situation "the best alignment of economic and political conditions for stability in defense budgets that we have seen in 10 years."

EIA experts estimate 14 percent growth in military electronics spending over the next decade - a slightly more optimistic projection from last year - from $51.5 billion in 1997 to $58.9 billion in 2007. All figures are in constant 1998 dollars.

The greatest growth in the electronic spending will be in procurement, where EIA experts predict an increase from $18.5 billion this year to $23.8 billion in 2007. Spending in research, development, test, and evaluation; and operations and maintenance will remain stable, EIA officials predict.

EIA experts predict the overall DOD budget to decline from $254 billion to $243 billion over the next decade. This also is an improvement over past projections, which anticipated the budget to drop to about $230 billion.

Also as part of their 10-year forecast, EIA officials expect the National Aeronautics and Space Administration (NASA) budget to stabilize at about $13 billion to $13.5 billion for the remainder of the decade.

Association experts note, however, that NASA has been successful in its efforts to privatize operations, beginning with the first phase Space Shuttle operations contract to the United Space Alliance and moving next to a Consolidated Space Operations Contract, which will combine 17 individual support service contracts now in force at four NASA centers involved in spaceflight operations.

Another opportunity for industry, according to EIA, is NASA`s new Origins program, which coordinates four basic space science activities: structure and evolution of the universe, astronomical search for origins and planetary systems, solar system exploration, and sun-earth connection.

More in Test