The termination of NASA’s space shuttle program, primarily located at the Kennedy Space Center in central Florida, is a credit negative for Brevard County and surrounding areas, Moody’s Investors Service said in Monday’s Weekly Credit Outlook.
Although job losses at the center and related area businesses have been ongoing since 2004, when the termination of the shuttle program was first announced, the recent completion of the final mission in conjunction with the severity of the housing market crisis “could weigh heavily on an already sluggish economy,” said the report by analyst John Incorvaia.
Moody’s assigns a Aa2 to Brevard County, where the local economy has been driven by the presence of NASA and other of high-tech employers.
In 2008, NASA’s total economic impact in Florida was $4.1 billion and provided 40,802 direct and indirect jobs. From 2004 to 2010, the county’s unemployed workers increased to more than 30,000 from 11,000. The space center accounted for many of the higher-paying jobs, with an estimated annual average salary in excess of $77,000. “The county is losing the space program at the same time it is battling the continued effects of the recession,” Incorvaia said.
The recession has hurt Brevard’s assessed valuation, with the tax base declining by 40% over the last four years, to $24.7 billion in fiscal 2012.
Incorvaia said the large county and its economic diversity “have been helpful in coping with the negative impacts of the economic recession.”
“State and local officials are working to attract other businesses that are interested in utilizing facilities at the Kennedy Space Center,” he said. “These new companies, involved in space exploration or travel, are expected to replace a number of the estimated 3,000 people recently laid off, although these endeavors will likely take some time to ramp up.”
Incorvaia said ongoing efforts to better utilize existing high-tech and aerospace jobs expertise demonstrate a commitment to transitional economic development that could bode well for the county.
As the shuttle program powers down, effects on related area businesses could linger, he said. A failure to maintain budgetary balance would result in weakened credit profiles for area governments.