Port St. Croix, United States Virgin Islands.
St. Croix South Shore Free Trade Zone
St. Croix South Shore
The Economic Importance of the U.S. Shipbuilding and Repairing Industry
In 2019, the U.S. private shipbuilding and repairing industry directly provided 107,180 jobs (see Figure E1, below), $9.9 billion in labor income, and $12.2 billion in gross domestic product, or GDP, to the national economy (see Figure E2, below). Including direct, indirect, and induced impacts, on a nationwide basis, total economic activity associated with the industry reached 393,390 jobs, $28.1 billion of labor income, and $42.4 billion in GDP in 2019.
Things Are Looking Positive in the U.S. Shipbuilding Industry
Demand for Energy-Related Vessels Drives the Shipbuilding Industry
Independent research analyst IBISWorld has pegged the sector’s employment numbers at levels equivalent to the MARAD report, though it assesses revenues at a lower level ($26 billion). Their analysis of past performance and industry trends seems to fall between the perspectives of the two maritime publication articles:
Over the past five years, the shipbuilding industry has slowly sailed rough seas as demand from the military and commercial markets fluctuated. As a result of pressured military funding and recession-induced commercial backlog decline, demand for shipbuilding declined in the early part of the five-year period. However, the boom in U.S. oil and natural gas production has recently led to a surge in demand for energy-related vessels. Over the next five years, the industry is anticipated to catch more wind from renewed funding for military ships and continued demand for energy industry-related vessels. As the U.S. Navy attempts to meet its objective of creating a fleet to meet the challenges of the coming years, demand for new naval vessels will rise.
With more than 70 percent of shipbuilding industry revenue tied to the defense sector, it’s clear that defense funding and spending will have the greatest impact on shipbuilding activity moving forward. Having the ability to deliver on time and on budget will provide shipbuilders an advantage as they pursue these contracts. Shipbuilders and repair firms that do this most successfully will leverage the latest technology to manage the complex manufacturing at the core of their businesses.
GAO: Poor Conditions at Navy Shipyards