BY MICHAEL HANSEN – The U.S. Maritime Administration (MARAD) released a report on June 19th describing the economic activity and impact of the U.S. shipbuilding and ship repair industry. The report, which was apparently written in house, is entitled “The Economic Importance of the Shipbuilding and Repairing Industry” and dated May 30, 2013. The report indicates the dominate role military capital ship construction plays in respect of the entire industry, and the vibrancy of the private inland waterways sector.
MARAD is an agency of the U.S. Department of Transportation (USDOT) charged with promoting the U.S. maritime industry. It has been referred to as the Jones Act Administration, for its statutory role in supporting the domestic maritime industry.
Although parts of the report aggregates data from the several sectors of the shipbuilding and ship repair industries, other parts breakout some of the data. The most obvious example is that parts of the report tend to lump together commercial and military shipbuilding and ship repair data.
However, the dominate role played by government shipyard work does emerge as the report does show that 60% of all shipbuilding and repairing revenue is from U.S. military sources. It is also reflected in thr geographic distribution of shipyard jobs presented by the report. The greatest shipyard employment in ten states, of which six are where major shipbuilding yards specializing in military construction are located (Maine, Connecticut, California, Virginia, Louisiana, and Mississippi).
As the report noted. “The federal government, including the U.S. Navy, U.S. Army, and U.S. Coast Guard, remains an important source of demand for U.S. shipbuilders. While only 15 of the 1,459 vessels delivered in 2011 were delivered to the U.S. government, nearly all (8 out of 11) of the large deep-draft vessels delivered were delivered to U.S. government agencies (seven to the U.S. Navy and one to the National Oceanic and Atmospheric Administration).”
In addition, the data includes the inland waterways. The inland waterways are the largest commercial sector of the U.S. maritime industry. This can be seen in the data in terms of the number of vessels constructed annually. For example, in the calendar year 2012, the report states the number of commercial push towboats, inland tank barges and inland freight and deck barges was 1,146 out of a total production of 1,260 vessel of all kinds including military construction.
According to the report, U.S. shipyard employment has been relatively stable over the past 12 years in the range of between approximately 90,000 and 105,000 people directly employed by U.S. shipyards. The latest data from 2012 indicates there were 98,072 shipyard jobs in the U.S.
The MARAD report reinforces the perception that the U.S. shipbuilding and repairing industry is heavily dependent on military capital ship construction that is performed in six of the eight major U.S. shipbuilding yards, and, on the commercial side of the business, the private inland waterways sector.
The report confirms that the number of commercial deep draft oceangoing ships constructed in U.S. for the restricted Jones Act trades where U.S. built ships are required remains abysmally low. These are the ships needed for employment in the noncontiguous domestic trades – Alaska, Guam, Hawaii and Puerto Rico – where alternative modes of interstate surface transportation are not available due to geography.
Michael N Hansen is the President of the Hawaii Shippers Council, a business league organization incorporated in 1997 to represent cargo interests – known as “shippers” – who tender goods for shipment with the ocean carriers operating the Hawaii trade.
MARAD Report: The Economic Importance of the Shipbuilding and Repairing Industry, May 30, 2013
MARAD Press Release: MARAD Report: Nation’s Shipyards Support $36 Billion in Gross Domestic Product, June 19, 2013
Shipbuilder’s Council of America (SCA) Press Release: MARAD Study: Shipyards Support Jobs In All 50 States, June 20, 2013
Colton Company / Maritime Memo (a blog): Shipyards Have Economic Impact, June 19, 2013
Colton Company / Maritime Memo
Shipyards Have Economic Impact
MARAD has released a report on the economic impact of the U.S. shipbuilding industry. Conclusions: good jobs, nationwide impact, multiplier of about 3.3. Read MARAD’s announcement here. Read the Shipbuilders Council’s announcement here. Read the report itself here. Comment later. June 19, 2013.
Well now, that’s not bad at all. Short and to the point and unencumbered by all the pages and pages of unintelligible garbage that you get from big consulting companies. Since no authors or participants are identified, it must have been done in-house, which is a good sign. The conclusions are consistent with my observations and with previous economic impact studies, of which there have been at least three, I think, since the collapse of the industry back in the Reagan years. The bit about average pay being 45% above the national average is somewhat misleading: I would have split the data in two, to reflect what I believe to be the case, that, largely thanks to the Navy, we have a relatively high proportion of well-paid salaried personnel,while our hourly employees are not overpaid at all. Note that a lot of the basic data came from my ShipbuildingHistory website. It used to be that we went to MARAD for data like these: do you remember the statutorily required Annual Survey of Shipbuilding, which MARAD stopped publishing in 2004? One of the reasons I started the statistical section of the SH web site was to compensate for MARAD’s abandonment of that responsibility, and now, it seems, they come to me. June 20, 2013.
U.S. Department of Transportation / U.S. Maritime Administration (MARAD)
Maritime Administration News Release
News Release #:
|Jun 19 2013|
MARAD Report: Nation’s Shipyards Support $36 Billion in Gross Domestic Product
LONG BEACH, Calif. – The U.S. Department of Transportation’s Maritime Administration (MARAD) announced that the nation’s shipyards support $36 billion in gross domestic product, as part of a report on the U.S. shipbuilding and repair industry issued today. Acting Maritime Administrator Paul “Chip” Jaenichen shared the findings of the report, The Economic Importance of the U.S. Shipbuilding and Repairing Industry, at the FuturePorts Annual Conference in Long Beach, California.
“Shipyards create quality jobs and support economic growth far beyond our nation’s ports and waterways,” said U.S. Transportation Secretary Ray LaHood. “This report shows that wherever you live across the country, Americans benefit from opportunities generated by the shipbuilding and repair industry.”
The report notes that although most shipbuilders are located in coastal areas, the direct and indirect economic benefits reach all 50 states. In 2011, the nation’s more than 300 shipyards directly provided more than 107,000 jobs, $7.9 billion in labor income to the national economy and contributed $9.8 billion in Gross Domestic Product (GDP). In addition, the average income for these industry jobs, $73,000, is 45 percent higher than the national average. On a nationwide basis, including direct, indirect, and induced impacts, the industry supported 402,010 jobs, $23.9 billion of labor income and $36 billion in GDP.
The Obama Administration recognizes the economic importance of the maritime industry and has provided historic levels of funding to improve shipyards across the nation. Since 2009, the Department of Transportation has provided nearly $150 million to improve infrastructure at U.S. shipyards through its small shipyard grant program.
“Our shipyard investments go directly toward an industry that’s vital to our economic security and national defense,” said Acting Administrator Jaenichen.
The report notes the U.S. shipbuilding industry has run a trade surplus in six out of the last ten years, with a cumulative trade surplus of $410 million over this period. The report also shows that from 2010 to 2012, deliveries of vessels of all types, including tugs and towboats, passenger vessels, commercial and fishing vessels, and oceangoing and inland barges, exceeded 1,200 vessels per year, reaching 1,457 vessels in 2011.
The Maritime Administration works to strengthen the maritime transportation system of the United States to meet the country’s economic and security needs. The report, The Economic Importance of the U.S. Shipbuilding and Repairing Industry, can be found athttp://www.marad.dot.gov/documents/MARAD_Econ_Study_Final_Report_2013.pdf.
Shipbuilder’s Council of America (SCA)
MARAD Shipyard Economic Benefits Study Released
FOR IMMEDIATE RELEASE
MARAD STUDY: SHIPYARDS SUPPORT JOBS IN ALL 50 STATES
Contact: Ian Bennitt (202) 772-5579
More than 107,000 people work in the nation’s private shipyard building and repairing America’s military and commercial fleets, according to a report released today by the U.S. Maritime Administration (MARAD). With shipyard-related jobs in every state in the union, workers in this sector earn about $8 billion and produce $9.8 billion worth of goods and services each year, the report found.
The report, entitled “Economic Importance of U.S. the Shipbuilding and Repairing Industry,” considered the economic impact of the private shipbuilding and repair sector as a whole, including shipyards and industry suppliers, along with multiplier effects such as revenue at small businesses serving maritime workers and their families. All told, the report found, the industry supports more than 400,000 jobs across the country and generates $23.9 billion in income and $36 billion worth of goods and services each year.
“The economic impact of shipbuilding and repair extends beyond our coasts, the Great Lakes and inland waterways,” said Frank Foti, chairman of the Shipbuilders Council of America (SCA). “Shipyard work supports good paying jobs for skilled industrial craftspeople in all 50 states.”
The report found that jobs in the shipyard industry paid $73,630 on average in 2011. That’s 45 percent more than the $50,786 national average for the private sector economy.
These jobs have a big effect on the wider economy. According to the study, each job in the private shipbuilding and repairing industry supports to another 2.7 jobs nationally. Each dollar of labor income in the shipyad sector leads to another $2.03 in labor income in other parts of the economy, and each dollar worth of goods and services leads to another $2.66 in the wider economy. In addition, men and women trained in America’s shipyard often go on to own local businesses in skilled trades, supporting their communities.
Matthew Paxton, SCA president, added “MARAD’s report clearly demonstrates how this industry is vital to both our national and economic security. SCA would like to thank MARAD for this important educational study.”
The report can be found HERE.
SCA shipyard members operate 86 facilities 29 different states. These companies constitue the industrial base that builds and repairs the most sophisticated and complex Navy and Coast Guard vessels in the world. They also build and repair America’s domestic commercial fleet of over 40,000 vessels. SCA also represents 84 shipyard suppliers.