The military is one of Hawaiʻi's largest economic boosters, with billions of dollars in contract awards each year. The apparent rise in defense contract work in recent years is set to provide the state with economic stability in the near future.
The U.S. Department of Defense awarded more than $3 billion in contracts in Hawaiʻi in 2023. That's according to a recent report from Hawaiʻi's Military and Community Relations Office, or MACRO.
Most of that spending is for construction on Oʻahu military bases and at the Pearl Harbor Naval Shipyard, where construction of a dry dock is the largest project.
Laurie Moore, MACRO's executive director, says that spending is expected to sustain and even grow as work continues on military projects in the Pacific.
She says the $3 billion in spending is just a slice of the total economic impact the military has on Hawaiʻi. Moore says when you factor in direct, indirect and induced spending, the military contributes more than $17 billion to Hawaiʻi's economy.
She says that amounts to 16% of the state's gross domestic product.
Meanwhile, defense contracting is a small but growing segment of Honolulu’s office market, especially from companies that focus on defense technology.
For example, tech giant Palantir is moving into an office space at Pacific Guardian Center downtown after winning a 10-year, $10 billion contract with the Army.
Alexander Peach of Colliers Hawaii says he and other brokers are seeing increased activity from that sector from companies either entering the market or ramping up for contracts they're winning – or hoping to win.
