May 11,2004 -- As the bill for the war in Iraq mounts, long dormant industries like textile and apparel manufacturing have sprung to life to meet battlefield demands and they may be carrying the economy along with them.

Since President Bush declared the end to major combat operations in Iraq, the military's budget has spiked 15.1%, up $74 billion from the $463.3 billion spent in 2003. That figure makes up 16% of the country's economic growth through the first quarter of 2004, according to the Bureau of Economic Analysis.

As the Defense Department has increased its spending over the past year to augment the military's dwindling supplies of uniforms, vehicles and weapons, it has sent employment in the manufacturing sector skyrocketing and given employment numbers in the manufacturing sector a healthy boost.

Although the Labor Department can't say how many of the 708,000 new domestic jobs created in the past three months are due to increased defense spending, the spike has helped the apparel and textile industry to its first net job gain over the first four months of any year since 1990, according to statistics maintained by the department.

The downside to the military's budget increases is that the federal budget deficit will likely grow to more than $400 billion by the end of the year. As the government borrows money to cover the cost of the war, which will soon top the $199 billion spent to fight World War I, economists say that tax payers will likely be asked to pick up a larger share of the debt or face reduced government services.