National Aeronautics and Space Administration

Economic Impact of
NASA In Florida
FY 2005
 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

Preface

The National Aeronautics and Space Administration (NASA) has a number of Centers that help the
Agency pursue the national vision for space exploration and discovery. The Kennedy Space Center
(KSC) in Florida is one of those centers, and as such plays an important role in Agency exploration
and discovery efforts.

As good stewards of the responsibilities and resources the nation entrusts to the Agency and its
centers, NASA strives to maximize the benefits produced by activities it conducts at its centers,
including KSC, while minimizing costs. In addition to the technical and social benefits derived from
these activities, the total benefit of business NASA conducts also includes significant economic
benefits in the locations it operates across the country, including Florida. To help quantify,
understand, and communicate this benefit, the Chief Financial Officer (CFO) at KSC annually
produces an economic impact assessment of NASA spending in Florida covering three concentric
economic areas: local (Brevard county), regional (central Florida counties) and state. The CFO
typically enlists the help of one or more outside economic experts in developing these assessments.
This year’s assessment uses the results of a study conducted by the Transportation Economics
Research Institute, a Mt. Dora, FL based private organization under the direction of Dr. Warren
McHone, who is also a Professor of Economics at the University of Central Florida. The study was
based on data supplied by KSC and its affiliates. This report of this year’s economic impact
assessment has been collaboratively produced by Dr. McHone and KSC CFO personnel.

The Office of the CFO is pleased to submit the results of this Fiscal Year 2005 assessment, covering
the period from October 1, 2004 through September 30, 2005. The study and methodology used has
been reviewed and we concur with the findings of that study, contained in this report.

Additional copies of the report are available through the Office of the NASA KSC CFO,
(321) 867-3726.

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

Economic Impact of NASA In Florida

Fiscal Year 2005

Produced by the NASA Office of the CFO at

Kennedy Space Center, Florida

with the support of W. Warren McHone, PhD

Transportation Economics Research Institute (TERI)

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

Table of Contents

Preface ................................................................................................................................................ i

Table of Contents............................................................................................................................... v

1. Study Highlights .................................................................................................................... 1

2. NASA Operations at KSC and Elsewhere in Florida ............................................................ 3

2.1. Space Shuttle Program (SSP) Return To Flight (RTF) and International Space Station
Program (ISSP) ........................................................................................................... 3
2.2. ELV Launch Operations............................................................................................... 3
2.3. Other NASA Funded Activities in Florida ..................................................................... 4
2.4. Sources of NASA’s Economic Impact in Florida........................................................... 4

3. NASA Space Program Spending In Florida .......................................................................... 5

3.1. Recent Trends in NASA’s Spending in Florida ............................................................. 5

3.2. The Location of NASA Spending in Florida .................................................................. 6
3.3. Employment at KSC .................................................................................................... 7
3.4. Earnings at KSC.......................................................................................................... 8
3.5. Non-Labor Purchases in Florida .................................................................................. 8

4. Spending By Tourists and Business Visitors .................................................................... 10

4.1. KSC Visitor Center Operations .................................................................................. 10

4.2. Impact Relevant Visitor Center Spending .................................................................. 10
4.3. Business Visitor Spending ......................................................................................... 11

5. Monetary Injections into Florida Economies...................................................................... 12

6. Total Economic Impact of NASA in Florida ........................................................................ 14

6.1. Indirect Economic Activity Generated by NASA Spending ......................................... 14

6.2. Total Economic Impact .............................................................................................. 14
6.3. Impact Multipliers ...................................................................................................... 15

7. Summary .............................................................................................................................. 16

8. Notes .................................................................................................................................... 17

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

1. Study Highlights

The following is a summary list of highlights from this study.

• The monetary injections into the Florida economy by KSC and

other NASA Centers to support space and research program
operations at KSC were $1.65 billion in FY 2005. Measured in
constant dollar terms this was a 6.6% increase over the FY
2004 level.

• KSC & Other NASA Centers managed 1,392 contracts in

Florida in FY 2005. 90% of KSC/NASA spending (including
Civil Service wages) was concentrated on-site at KSC.

• Total KSC/NASA direct spending was $1.6 billion in Brevard

County, $31 million in other Central Florida counties and $68
million in other Florida counties.

• At 13,500 the total number of KSC on-site workers in FY 2005

was down by 7% from its FY 2004 level. 85% of the workers
were employed by prime contractors. As was true in FY 2004,
90% of the on-site work force lived in Brevard County and
another 8.6% commuted from other Central Florida counties.

• Spendable earnings of Workers at KSC were $936 million in

FY 2005. This was a 4% increase in constant dollar terms
over the previous year’s level.

• The average annual salary for KSC on-site workers was $69
thousand in FY 2005, which was almost twice the wage level of
the average Brevard County worker.

• Non-labor purchases by KSC and other NASA Centers in

Florida totaled $720 million in FY 2005. This represented an
11% increase over FY 2004 non-labor spending. Over two-
thirds of these purchases were concentrated in four industry
categories. Space Vehicle Manufactures, Propulsion Units &
Parts for Space Vehicles, Misc. Professional & Technical
Services, and, Scientific Research & Development Services.

1 - Study Highlights Page 1

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

• 865,000 out-of-state tourists visited the KSC Visitor Center

(KSCVC) in FY 2005 resulting in $21 million in wages and non-
labor purchases in the State by KSCVC. In addition, over
8,000 out-of-state business visitors came to KSC in FY 2005.
The total local travel expenditures of these business visitors
were $2.5 million.

• The total monetary injection of outside money into Florida’s

economy by all KSC based activities was $1.67 billion in FY
2005. This total consisted of $958 million in wage payments
to households and $716 million in non-labor purchases from
contractors. 88% of the total injection went to Brevard County
businesses and households.

• The injections of outside money into the state and local

economies plus the subsequent indirect transactions that were
generated by this spending resulted in a FY 2005 total
economic impact of NASA in Florida of $3.7 billion in output,
$1.8 billion in household income and 35 thousand jobs. The
injections also generated $187 million of federal taxes and $85
million of state and local taxes.

• 86% of the output impact, 88% of the income impact and 91%
of the jobs impact occurred in the seven county Central Florida
region.

• At the state level each direct job at KSC was multiplied into
2.52 total jobs, each dollar of earnings was multiplied into
$1.84 in total income and each dollar of total direct spending
for commodity purchases and wage payments was multiplied
into $2.20 of output production.

1 - Study Highlights Page 2

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

2. NASA Operations at KSC and Elsewhere in Florida

2.1. Space Shuttle Program (SSP) Return To Flight (RTF) and

International Space Station Program (ISSP)
After two and one-half years of concentrated effort to identify and correct any remaining safety issues
with the Space Shuttle Program, NASA’s Return To Flight efforts culminated with the launch of
STS-114 in July 2005. The STS-114 mission provided key support for ongoing International Space
Station (ISS) on orbit operations, including the delivery of ISS systems processed at KSC in
preparation for launch.

SSP Operations At KSC

Although the mission experienced some problems during the launch phase, it proved to be an
exceptional opportunity for NASA to demonstrate its abilities to identify and correct Shuttle problems in
space before returning to earth.

2.2. ELV Launch Operations

KSC performed payload processing and launch operations management for five Expendable Launch
Vehicle (ELV) missions in FY 2005, three from Cape Canaveral Air Force Station (CCAFS), and two
from Vandenberg Air Force Base (VAFB). Each of
these missions has produced, and will continue to
produce, valuable new scientific knowledge. The Swift
mission was launched on a Delta II rocket from CCAFS
in November 2004. The Deep Impact probe was
launched in January 2005, also on a Delta II from
CCAFS, with a mission to comet Tempel 1.
Demonstration of Autonomous Rendezvous
Technology (DART) was launched on a Pegasus XL
and NOAA-N was launched on a Delta-II, both from
VAFB, in April and May of 2005. NOAA-N is the latest
KSC Managed ELV Operations
polar-orbiting satellite developed by NASA for the

2 - NASA Operations at KSC and Elsewhere in Florida Page 3

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

National Oceanic and Atmospheric Administration (NOAA) to collect information about Earth's
atmosphere and environment to improve weather prediction and climate research across the globe.
The Mars Reconnaissance Orbiter was launched on an Atlas V in August 2005 from CCAFS, and has
already provided unprecedented images of Mars.

2.3. Other NASA Funded Activities in Florida

Not all NASA activities in Florida originate from the Kennedy Space Center. As in previous years,
other NASA Centers funded and managed many contracts (and in turn, subcontracts, vendors and
suppliers) for a multitude of Florida products and services. For example, a major Florida aerospace
contractor continues support for the Space Shuttle Main Engine (SSME), which is work performed
under a Marshall Space Flight Center (MSFC) contract. All NASA costs are included in this study.

2.4. Sources of NASA’s Economic Impact in Florida

In addition to KSC/NASA’s spending on space operations and research there are a number of other
activities directly associated with KSC that add to its total economic impact. These include the local
travel expenditures of out-of-state business and government personnel that travel to KSC to conduct
business and the Kennedy Space Center Visitor Center’s (KSCVC) sales to out-of-state visitors. The
economic impact of all of these activities is presented in this report. The analysis is conducted at three
geographic levels – Brevard County, the larger Central Florida Region, which includes Brevard,
Flagler, Lake, Orange, Osceola, Seminole and Volusia counties, and the State as a whole.

2 - NASA Operations at KSC and Elsewhere in Florida Page 4

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

3. NASA Space Program Spending In Florida

3.1. Recent Trends in NASA’s Spending in Florida

The money that NASA expends in Florida to support its space missions and other research activities
represents an enormous injection into the economies of Brevard County, the larger Central Florida
region and the State of Florida. These injections come in the form of wages to local residents and the
purchase of goods and services from local businesses and organizations. As shown in Exhibit 1, to
support space program launch and landing operations at KSC, in FY 2005 KSC and other NASA
Centers injected $1.65 billion into the Florida economy and $1.46 billion into the Brevard County
economy. After adjusting for inflation, these amounts represented a 6.6% increase for the State and a
1% increase for the county compared to their FY 2004 levels. Furthermore, unlike the previous two
years, the FY 2005 statewide spending finally eclipsed the FY 2002 level.

In FY 2005 KSC
KSC/NASA SPACE OPERATIONS SPENDING IN BREVARD COUNTY AND FLORIDA and other NASA
IN CONSTANT 2005 DOLLARS
Centers injected
$$1.65 billion and
$1.46 billion,
$1.80
respectively, into
$1.60
the Florida and
Brevard County
$1.40 economies to
support NASA
Billions of $2003

$1.20 program
operations at
$1.00
Kennedy Space
$0.80 Center (KSC).
These amounts
$0.60 represented a 6.6%
increase for the
$0.40
State and a 1%
$0.20
increase for the
County compared
$- to their FY 2004
2001 2002 2003 2004 2005 levels.
Fiscal Year

Brevard County State of Florida

Exhibit 1

3 - NASA Space Program Spending In Florida Page 5

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

3.2. The Location of NASA Spending in Florida

Brevard County (KSC and CCAFS) is the primary launch site for most of NASA’s space missions. To
support the launch and other related responsibilities, KSC managed 951 separate contracts in FY
2005 with a total value of $933 million. While the majority of these dollars was concentrated in awards
to major contractors, over 50% of KSC awards were for small contracts ($50,000 or less). Eight other
NASA Centers managed a total of 441 contracts in Florida in FY 2005 with a fiscal year value of $581
million. The NASA Space Shuttle Program’s Space Flight Operations Contract (SFOC) was managed
by Johnson Space Center in Texas. The portion of the contract performed at KSC was $522 million
which was 90% of the spending by the eight other NASA centers in Florida in FY 2005.

All together KSC and the other eight NASA Centers spent $1.65 billion in Florida in FY 2005. 90%
percent of this spending was for awards to on-site/near-site contractors and wages to on-site Civil
Service and contractor workers. Total direct spending in Brevard County was over $1.55 billion.
Direct spending in other Central Florida counties and other counties in Florida totaled $31 million and
$68 million, respectively.

TOTAL SPENDING BY KSC AND OTHER NASA CENTERS IN FLORIDA BY PLACE OF

PERFORMANCE FY 2005

KSC and Other

NASA Centers
spent $1.65
$1,800 billion (including
$1,600
Civil Service
wages) in Florida
$1,400 in FY 2005. 90%
$1,200
of this total was
concentrated in
Millions of 2002 $

$1,000 Brevard County.

$800

$600

$400

$200

$-
Other
KSC On- Brevard
Central Other Florida Total Florida
site/Near-site Total
Florida
Total Contract Awards Plus Civil $1,489 $1,557 $31 $68 $1,655
Service Earnings

Exhibit 2

3 - NASA Space Program Spending In Florida Page 6

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

3.3. Employment at KSC

There were 13,505 on-site and near-site workers at KSC in 2005. This includes workers involved in
launch and space flight control and payload processing and scientific research as well as those
workers involved in planning, maintenance and operation of KSC facilities. The overwhelming majority
(85%) of on-site workers was employed by KSC/NASA prime contractors. The remainder was federal
civil service workers employed by KSC and other NASA Centers. As might be expected, most (90%)
of the employees at KSC lived in Brevard County. However, as illustrated in Exhibit 3, over eleven
hundred workers commuted from nearby Central Florida counties and a small number of workers lived
in other Florida counties or resided outside the State.

EMPLOYMENT BY RESIDENCE FOR KSC AND OTHER NASA CIVIL SERVICE EMPLOYEES There were 13,505
AND ON-SITE/NEAR-SITE CONTRACTOR PERSONNEL FY 2005
on-site workers at
16,000 KSC in FY 2005.
The largest
14,000 portion (85%) of
these workers was
12,000
employed by
prime contractors.
10,000
90% of the on-site
Employees

8,000 workforce resided

in Brevard County
6,000 with another 8.6%
commuting from
4,000 other Central
Florida Counties.
2,000

-
Brevard Other Central Florida Other Florida Florida Total Out-of-State Total by Workplace

KSC & Other NASA Contractor Employees

KSC & Other NASA Civil Service Employees

Other
Central Other Total by
Brevard Florida Florida Florida Total Out-of-State Workplace

KSC & Other NASA Civil Service Employees 1,653 300 31 1,984 70 2,054
KSC & Other NASA Contractor Employees 10,497 865 89 11,451 - 11,451
Total On-site/Near-site KSC & Other NASA Personnel 12,150 1,165 120 13,435 70 13,505

Exhibit 3

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

3.4. Earnings at KSC

Contract and civil service workers at KSC received $936 million dollars in spendable earnings in FY
2005 (see Exhibit 4). 99% of these wages were paid to residents of Brevard and other Central Florida
counties. A large majority of the workers at KSC are highly trained engineers, scientists and
technicians that command relatively high salaries. Accordingly the average annual salary for the KSC
workforce was $69,000, which is almost twice the $35 thousand salary that was earned by the average
Brevard County worker.

EARNINGS BY RESIDENCE FOR KSC AND OTHER NASA CIVIL SERVICE EMPLOYEES Workers at KSC
AND ON-SITE/ NEAR-SITE CONTRACTOR PERSONNEL FY 2005
received $936
$1,000 million in
$900
spendable earnings
in FY 2005. 99% of
$800
these earnings
were paid to
Earnings in millions of 2005$

$700

$600
workers residing in
Brevard and other
$500
Central Florida
$400 counties. The
$300
average annual
salary for these
$200
workers was
$100 $69,000 which was
$-
almost twice the
Brevard Other Central Other Florida Florida Total Out-of-State Total by Workplace salary that was
Florida
earned by the
average Brevard
On-site/Near-site Contractor Employee Earnings County worker.
KSC/ Other NASA Civil Service Employee Earnings

Other
Central Other Florida Out-of- Total by
Brevard Florida Florida Total State Workplace
KSC/ Other NASA Civil Service Employee Earnings $ 114 $ 21 $ 2 $ 137 $ 5 $ 142
On-site/Near-site Contractor Employee Earnings $ 728 $ 60 $ 6 $ 794 $ - $ 794
Total On-site/Near-site Earnings $ 842 $ 81 $ 8 $ 931 $ 5 $ 936

Exhibit 4

3.5. Non-Labor Purchases in Florida

KSC and other NASA Centers’ non-labor purchases in Florida totaled $720 million in FY 2005 and
were concentrated in a relatively small number of commodity categories. As revealed in Exhibit 5, the
top four commodity categories constituted over two-thirds of the total non-labor purchases that were
made by KSC and other NASA Centers in Florida in FY 2005. 89% of the total non-labor purchases
were concentrated in the top twelve commodity purchase categories.

3 - NASA Space Program Spending In Florida Page 8

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

The top commodity category in FY 2005 was the $223 million in purchases from Space Vehicle
Manufactures. The overwhelming portion of the purchases in this category was from the contractor
that provides the launch vehicles and packages the payloads for Delta Rocket launches. Purchases of
Propulsion Units & Parts for Space Vehicles came in second at $117 million in FY 2005. At $97 million
Misc. Professional & Technical Services represented the third largest commodity category. Rounding
out the top four categories was the $59 million spent in the Scientific Research & Development
Services category.

MAJOR COMMODITY PURCHASES BY KSC AND

OTHER NASA CENTERS IN FLORIDA FY 2005
( Commodity Categories with NASA/KSC Purchases of $10 Million+)

(Purchases in millions of 2005 $)

$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240

Space Vehicle Manufacturing

Propulsion Units and Space Vehicles Parts

Misc Professional & Technical Services

Commodity purchases by KSC and
Scientific Research & Development Services
other NASA Centers in Florida totaled
College & Universities Grants & Contracts $720 million in FY 2005. Over two-
Commercial & Institutional Bldg Construction thirds of these purchases were
Services to Buildings
concentrated in four industry
categories: Space Vehicle
Computer Services & Facilities Management
Manufacturing; Propulsion Units &
Engineering Services Parts for Space Vehicles; Misc.
Business Support Services Professional & Technical Services;
and Scientific Research &
Investigation & Security Services
Development Services.
Industrial Gas Manufacturers

All Other Commodities

Brevard County Other Central Florida Other Florida

COMMODITY NAME Brevard County Other Central Florida Other Florida Florida Total
Space Vehicle Manufacturing $ 222 $ - $ 0 $ 223
Propulsion Units and Space Vehicles Parts $ 114 $ - $ 3 $ 117
Misc Professional & Technical Services $ 57 $ 17 $ 23 $ 97
Scientific Research & Development Services $ 57 $ 0 $ 1 $ 59
College & Universities Grants & Contracts $ 2 $ 7 $ 25 $ 34
Commercial & Institutional Bldg Construction $ 31 $ - $ - $ 31
Services to Buildings $ 17 $ - $ 0 $ 17
Computer Services & Facilities Management $ 15 $ - $ 0 $ 15
Engineering Services $ 10 $ 0 $ 3 $ 13
Business Support Services $ 12 $ 0 $ 0 $ 12
Investigation & Security Services $ 11 $ - $ - $ 11
Industrial Gas Manufacturers $ 9 $ 2 $ - $ 10
All Other Commodities $ 64 $ 5 $ 12 $ 81
Total Commodity Purchases $ 621 $ 31 $ 68 $ 720

Exhibit 5

3 - NASA Space Program Spending In Florida Page 9

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

4. Spending By Tourists and Business Visitors

4.1. KSC Visitor Center Operations

KSC’s economic presence in Florida is not just limited to the contracts and employees that are
required to carry out NASA launch and research programs. 865,000 out-of-state residents visited
KSC’s Visitor Center (KSCVC) in FY 2005. These visitors spent a little over $48 million on goods and
services provided by the Visitor Center. The KSCVC had 697 employees which it paid $20 million in
wages. All of these employees were residents of Central Florida. In addition to its payroll expenses,
the Visitor Center spent $29 million to purchase the merchandise and services that are required to
operate the facility.

Figure 1 - KSC Visitors Center

4.2. Impact Relevant Visitor Center Spending

In considering the economic impact of Visitor Center expenditures in Florida, it is necessary to focus
only on the portion of the purchases and wages that went to Florida firms and residents. While all of
the wages paid by the KSCVC went to Brevard and other Central Florida residents, only 49% of the
$29 million in procurement purchases was from Florida firms. In addition to adjusting for out-of-state
purchases, it is also necessary to adjust the in-state spending to reflect the portion that is attributable
to out-of-state visitors. The logic behind such an adjustment is that the expenditures by in-state
visitors do not represent an injection of outside money into the state and local economies. Instead,
these expenditures are only a transfer of economic activity between sectors within the state or local
economy. Based on the geographic distribution of visitors, it was determined that 62% of the total
activity at the Visitor Center could be attributed to out-of-state visitors. Consequently, the amounts of
KSCVC spending that were relevant for the impact analysis were $12.5 million in salaries and $8.9
million in other non-labor purchases for a total injection of $21 million.

4 - Spending By Tourists and Business Visitors Page 10

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

4.3. Business Visitor Spending

One other source of NASA’s economic stimulus in Florida was the local travel expenditures of out-of-
state business visitors that came to KSC in FY 2005. This includes visitors that came from NASA
Headquarters, other NASA Centers and out-of-state contractor personnel. The purpose of the visits
included pre-launch meetings and reviews, general information exchange and a variety of other
business functions. It was estimated that there were over 8,000 such business visitors in FY 2005.
Their total local travel purchases for lodging, food, car rentals and other miscellaneous items was $2.5
million.

All of these expenditures represented an injection of outside money into the local economy. The
spending by the Visitor Center attributed to out-of-state visitors and the local travel expenditures of
KSC business visitors’ resulted in a total injection of $24 million dollars into the local economy in FY
2005. The details of this injection are show in Exhibit 6.

KSC VISITOR CENTER COMMODITY AND LABOR PAYMENTS ATTRIBUTABLE TO OUT-OF STATE
VISITORS AND LOCAL TRAVEL EXPENDITURES OF KSC BUSINESS VISITORS

20,000 In FY 2005 the KSC

18,000
Visitor Center hosted
865,000 out-of-state
16,000 visitors. In addition,
14,000 there were over 8,000
(Spending in thousands of 2005$) out-of-state business
12,000 visitors to KSC. Taken
10,000 together these two
sources provided a
8,000 $24 million injection
6,000 into the State’s
economy with the
4,000
overwhelming portion
2,000 concentrated in
Brevard and other
-
Central Florida
Brevard Other Central Florida Other Florida
counties.
Business Visitors Local Travel Spending
Visitor Center Wages and Salaries
Visitor Center Non-Labor Purchases

Other Central
Brevard Florida Other Florida Florida Total
Visitor Center Non-Labor Purchases $ 4,186 $ 3,789 $ 821 $ 8,797
Visitor Center Wages and Salaries $ 11,267 $ 1,202 $ - $ 12,469
Business Visitors Local Travel Spending $ 2,259 $ 234 $ - $ 2,493
Total Tourist and Business Traveler Spending $ 17,712 $ 5,225 $ 821 $ 23,759
Visitor Center Jobs by Residence $ 389 $ 43 $ - $ 432

Exhibit 6

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 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

5. Monetary Injections into Florida Economies

The purchases and household income payments that are described in the preceding sections of this
study are injections of outside money into the economies of Brevard County, the larger seven-county
Central Florida region and the state as a whole. These injections enter the economy through direct
purchases of goods and services from contractors and the direct payment of earnings to workers. For
the purpose of this analysis, all on-site contractors’ awards were divided into their wage and non-wage
components. The wage portion of these contracts was added to the earnings of KSC and NASA Civil
Service workers to arrive at the amount of direct household income received by all on-site workers at
KSC. Awards to colleges and universities were also divided into wage and non-wage components with
the latter being entered into the analysis as direct household income. Exhibit 7 shows the total direct
commodity purchases and direct household income payments resulting from spending for space
program operations, KSC Visitor Center sales to out-of-state tourists and KSC business visitors’ local
travel spending.

The total injection of outside money into Florida’s economy by all KSC based activities was $1.67
billion in FY 2005. Direct earnings payments to Florida households totaled $958 million and direct
commodity purchases from contractors were $716 million. Ninety-five percent of the direct payments
went to Central Florida businesses and households.

5 - Monetary Injections into Florida Economies Page 12

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

TOTAL INJECTIONS INTO FLORIDA ECONOMIES BY KSC/NASA ACTIVITIES SPENDING, LOCAL

TRAVEL EXPENDITURES OF KSC BUSINESS VISITORS AND KSC VISITOR CENTER PURCHASES
BY OUT-OF-STATE VISITORS FY 2005
In FY 2005 all KSC
based activities
$1,800 injected $1.67 billion
of outside money into
$1,600 Florida’s economy.
This total consisted of
$1,400
$958 million in direct
$1,200 (Spending in millions of 2005$) earnings payments to
households and $716
$1,000 million in direct
commodity purchases
$800 from contractors.
Ninety-five percent of
$600 the total injection
went to Central Florida
$400 businesses and
households.
$200

$0
Commodity Purchases Income Paid to Households Total Direct Injections

Brevard Other Central Florida Other Florida

Other Central
Brevard Florida Other Florida Florida Total
Commodity Purchases $627 $32 $58 $716
Income Paid to Households $854 $85 $19 $958
Total Direct Injections $1,481 $116 $77 $1,674

Exhibit 7

5 - Monetary Injections into Florida Economies Page 13

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

6. Total Economic Impact of NASA in Florida

6.1. Indirect Economic Activity Generated by NASA Spending

The economic activity generated by NASA organizations in Florida begins, but does not end, with the
direct purchases of these organizations and the wage payments to their workers. This first round of
spending generates a secondary set of economic interactions in the local businesses that supply
goods and services to NASA contractors and employees. These businesses, in turn, pay wages to
their employees and buy goods and services from their own suppliers and the process continues
through many subsequent rounds of purchases. All of these rounds of indirect activity are referred to
as the generated impact of the initial KSC/NASA injections into the economy.

The tracing and accumulation of all of the many rounds of generated economic activity that are set in
motion by NASA’s initial stimulus requires a complex set of economic models that map the structure of
the economy and the way in which the many sectors of the economy interact to support each other.
These models are referred to as regional input-output models. The specific models used in this study
utilize a highly detailed breakdown (500 plus economic sectors) of the economy to trace economic
transactions. Separate models were built for Brevard County, the larger seven-county Central Florida
region and the State of Florida as a whole.

6.2. Total Economic Impact

The total impact of all KSC/NASA activities in Florida (see Exhibit 8) is the sum of the initial injection of
earnings and commodity purchases plus the subsequently generated impact of these injections. In FY
2005, this total impact in Florida was $3.7 billion in output; $1.8 billion of household income and
35,000 jobs. This activity also generated $187 million of federal taxes and $85 million of state and
local taxes. The largest share of the impact—86% of the output impact, 88% of the income impact and
91% of the employment impact—occurred in the seven county Central Florida Region.

6 - Total Economic Impact of NASA in Florida Page 14

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

THE TOTAL ECONOMIC IMPACT OF ALL NASA ACTIVITIES AT KSC

ON FLORIDA BY GEOGRAPHIC AREA FY 2005 In FY 2005 the total
economic impact of
4,000 NASA in Florida was $3.5
billion in output, $1.8
3,500 billion in household
income and 35,000 jobs.
3,000 Output, Income & Taxes in millions of 2005$ This activity also
Employment in 00's generated $187 million of
2,500
federal taxes and $85
million of state and local
taxes. 86% of the output
2,000
impact, 88% of the
income impact and 91%
1,500
of the jobs impact
occurred in Central
1,000 Florida.

500

-
Output Income Federal Taxes State & Local Taxes Employment

Brevard County Central Florida Region State of Florida

(Millions of 2004 $) (Jobs in 00's)

Area of Economic Impact State & Local
Output Income Federal Taxes Employment
Taxes
Brevard County 2,196 1,184 72 23 210
Central Florida Region 3,168 1,554 167 69 318
State of Florida 3,680 1,758 187 85 350

Exhibit 8

6.3. Impact Multipliers

Impact multipliers provide a summary measure of the economic potency of a particular economic
activity. Multipliers were calculated in this study for Output, Income and Employment. The Output
Multiplier is the total output impact as shown in Exhibit 8 above divided by the total direct spending for
commodity purchases and wage payments to workers. The Income Multiplier is the total income
impact shown in Exhibit 8 divided by the wage payments to all KSC based employees. Finally, the
employment multiplier is the total employment impact shown in Exhibit 8 divided by the number of on-
site employees at KSC.

The multipliers that were calculated for each of the geographic study areas in this analysis are shown
in Exhibit 9. The jobs multiplier for the State as a whole indicates that each direct on-site job (i.e. Civil
Service and contractor employees) at KSC was multiplied into 2.52 total jobs throughout the Florida
economy. It should be noted that this represents the direct job itself plus 1.52 jobs that were
generated through the indirect economic process. The Florida income multiplier indicates that each

6 - Total Economic Impact of NASA in Florida Page 15

 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

dollar of direct wages that was paid at the KSC complex resulted in $1.84 of total income in the State.
The output multiplier shows that each dollar of direct total spending for commodity purchases and
wage payments generated $2.20 in total statewide output. Similar interpretations apply to the Central
Florida and Brevard County multipliers.

NASA IMPACT MULTIPLIERS FY 2005

At the state level
each direct job at
Jobs, 2.52
KSC was multiplied
into 2.52 total jobs,
Florida Income, 1.84
each dollar of
Output, 2.20 income was
multiplied into $1.84
in total income and
Jobs, 2.32 each dollar of total
Central Florida Income, 1.82 direct spending for
Output, 2.14 commodity
purchases and wage
payments was
Jobs, 2.48 multiplied into $2.20
Brevard Income, 1.39 of output production.
Output, 1.48

0.00 0.50 1.00 1.50 2.00 2.50 3.00

Exhibit 9

7. Summary

The monetary injections by KSC and other NASA Centers into the overall Florida economy in FY 2005
were up by 6.6% over the previous year’s level in constant dollar terms. This growth occurred even
though on-site/near-site direct employment was down slightly from its FY 2004 level. Total commodity
purchases were up sharply (11%) in FY 2005, while direct wages increased by 4%. On a constant
dollar basis, total spending in the State reached its highest level of the decade. The large number of
highly paid employees and the high dollar contracts that are awarded within the State created both a
direct effect for state businesses and residents and a strong indirect impact on businesses and
households that were not directly associated with the “space industry.” In FY 2005 KSC and other
NASA space operations and other on-base activities created a total economic impact for the State of
$3.7 billion in output, $1.8 billion in income and 35 thousand jobs. The total economic impact was
highly concentrated in Central Florida with an output impact of $3.2 billion, an income impact of $1.6
billion and an employment impact of 32,000 workers.

7 - Summary Page 16
 National Aeronautics and Space Administration
Economic Impact of NASA In Florida FY 2005

8. Notes

The following are some notes about the study and this report.

Impact Models: The economic impact analysis presented in this report is generated by a set of
regional input-output models constructed by the Transportation Economics Research Institute using
the Minnesota IMPLAN Groups (MIG) software package. Structural data for the models, which is
updated on an annual basis, was also provided by MIG.

Study Areas: Input-output models were constructed for three geographic areas—Brevard County,
Central Florida (which includes Brevard, Flagler, Lake, Orange, Osceola, Seminole and Volusia
Counties) and the State of Florida.

Data Sources: All data and numbers reported and used in this study are based on reports and
data files provided through the Office of KSC’s Chief Financial Officer or found on the KSC internet
site. Numbers reported in the impact section of the report were generated by the economic impact
models constructed for this study.

Methodology and Study Details: The methods of analysis, report assumptions and detailed
tables of results are available upon request.

8 - Notes Page 17
National Aeronautics and Space Administration
John F. Kennedy Space Center
Kennedy Space Center, FL 32899

www.nasa.gov

SP 2006 03 010