US defence firms revel in spending spree

It's gold rush fever in America's so called 'military silicon valley'.

And San Diego companies are beginning to reap the benefits of the extra $48bn the Bush administration is spending on defence in the wake of the worst terrorist atrocity committed on US soil.

The fear of a repeat of 11 September has led to mammoth budget increases in defence, homeland security and bioterrorism as the nation launches a major rearmament and wages what looks to be a lengthy war on terrorism.

The county's Chamber of Commerce says while most of the money is expected to flow to international defence giants with operations in the county, other local technology firms and even small obscure start-ups are also sharing in the largest defence build up in 20 years.

"Companies are aware of how to capitalise on those defence opportunities and we literally expect to see billions of dollars coming to this region in defence contracts," says the Chamber's chief economist Kelly Cunningham.