Post on 19-Mar-2020
THE ECONOMIC VALUE OF SHIPPING AND
MARITIME ACTIVITY IN EUROPE
Andrew P Goodwin
1 December 2016
INTRODUCTION
2
SHIPPING IS A VITAL FACILITATOR OF WORLD TRADE
3
Real-terms increase
in world GDP in the
last two decades
Increase in world
seaborne trade
over the same
period
90%IMO estimate of the value of world trade carried by
sea
112
%
73
%
€3.5
trillion
Value of EU’s trade
with the rest of the
world in 2015
OVERVIEW
The European Community Shipowners’ Associations (ECSA) asked
Oxford Economics to:
• Assess the economic contribution of the shipping industry Directly
Through its European supply chain
Through the spending of workers and those in the supply chain
• Estimate the impact of measures permitted under Community
guidelines on state aid to maritime transport
• Review the contribution of maritime academies
Extending the analysis to the wider maritime cluster – example from
the UK
4
DEFINITIONS
5
Transport of goods by sea (containerised and non-containerised)
Transport of persons by sea (on ferries and cruise ships)
Service and offshore support vessels (e.g. ships laying or repairing
undersea cables or pipelines; prospecting for oil; conducting oceanographic
research; diving assistance; undertaking undersea work; servicing offshore
wind farms, oil and gas platforms)
Towage and dredging at sea
The shipping industry
+
“The EU”
ECONOMIC IMPACT ANALYSIS
6
THE STUDY ASSESSES THE ECONOMIC IMPACT OF THE EU
SHIPPING INDUSTRY ACROSS THREE CHANNELS
7
Total economic impact
Induced impacte.g. Food and beverages
Other consumer goods
Restaurants
Recreation services
etc.
Indirect impacte.g. Ship building
Ship repairs
Port services
Insurance
Shipping-related financial and
legal services, etc.
Direct impacte.g. Freight services
Passenger services
Towing & dredging
Service and offshore support activities
Renting and leasing
WE ASSESSED THE ECONOMIC VALUE OF SHIPPING ACROSS
THREE METRICS
The contribution to
the economy of
each individual
producer, industry
or sector.
Aggregated across
all industries to
form the basis of
GDP
Gross value
added
contribution to
GDP
Measured on a
headcount basis
Employment
Employee income
taxes
Employee and
employer social
security
contributions
Tonnage and
corporation tax
VAT on
employees’
consumption
Tax revenues
THE STUDY DREW UPON ON EXISTING RESEARCH, OFFICIAL STATISTICS AND
THE OXFORD ECONOMICS GLOBAL INPUT-OUTPUT MODEL
Direct impact
Indirect
impact
Induced
impact
Previous national studies
Eurostat national accounts and Structural Business
Statistics datasets
Estimation to align time periods and sector definitions
Oxford Economics Global Input-Output
model Impact of the shipping industry on firms in its supply
chain
‘Induced’ impact of spending by shipping industry
employees and those in the supply chain
Estimates impacts that occur within countries, and cross-
country impacts amongst other EU countries
THE EU SHIPPING INDUSTRY IS ESTIMATED TO HAVE DIRECTLY
EMPLOYED 590,000 PEOPLE IN 2012
Travel agents &
tour operators
530,000
Forestry &
logging
500,000
Air transport
425,000
This means shipping employs more people than…
ALMOST TWO-THIRDS OF SHIPPING EMPLOYEES ARE
EMPLOYED IN FREIGHT TRANSPORT
372,000
158,000
54,0007,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Freight transport(incl. towing &
dredging)
Passenger transport Service & offshoresupport vessels
Renting & leasing
Source: Oxford Economics
IN 2012, THE EU SHIPPING INDUSTRY IS ESTIMATED TO HAVE
DIRECTLY CONTRIBUTED €56 BILLION TO EU GDP
€47bnto EU GDP
in 2004
€56bnto EU GDP
in 2012
+18%
EU average
€53,000Shipping
€88,000
2012 GDP per worker
Water
supply
€86,000
Film &
TV
€84,000
Air
transport
€71,000
Land
transport
€44,000
THE TOTAL GDP CONTRIBUTION OF THE EUROPEAN SHIPPING
INDUSTRY IN 2012 IS ESTIMATED TO HAVE BEEN €145 BILLION
56 56
59 59
30 30
0
20
40
60
80
100
120
140
160
Direct Indirect Induced Total
€bn
Source: Oxford Economics
€145bn
THE SHIPPING INDUSTRY ALSO SUPPORTED EMPLOYMENT
FOR AN ESTIMATED 2.3 MILLION PEOPLE
590 590
1,126 1,126
547 547
0
500
1,000
1,500
2,000
2,500
Direct Indirect Induced Total
000s
Source: Oxford Economics
2.3m
THE SHIPPING INDUSTRY HAS SIGNIFICANT ‘MULTIPLIER’
EFFECTS ACROSS THE WIDER EU ECONOMY
For every €1 million the
shipping industry
contributes to GDP itself, it
creates another €1.6 million
elsewhere in the economy
€1m
€1.6m
For every direct job the
shipping industry creates,
another 2.8 are created
elsewhere in the EU
economy
6 6
23 23
12 12
0
5
10
15
20
25
30
35
40
45
Direct Indirect Induced Total
€bn
Source: Oxford Economics
THE SHIPPING INDUSTRY SUPPORTED TOTAL TAX REVENUES
OF AROUND €41 BILLION IN 2012
Employee income
taxes
Employee and
employer social
security
contributions
Tonnage and
corporation tax
VAT on
employees’
consumption
Tax revenues
estimated
€41bn
THE IMPACT OF MEASURES PERMITTED UNDER
THE COMMISSION’S GUIDELINES ON STATE AID
TO MARITIME TRANSPORT
OVER AND ABOVE ITS ROLE IN FACILITATING TRADE, THE SHIPPING
INDUSTRY HAS A NUMBER OF UNIQUE FEATURES AND WIDER BENEFITS
WHICH PROVIDE A JUSTIFICATION FOR STATE SUPPORT
18
Inherent
mobility
Core of the
wider maritime
cluster
Security of
energy supply
Military
support &
peacekeeping
Safety
standards
Trained
seafarers
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,0001
980
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
200
0
200
2
200
4
200
6
200
8
201
0
201
2
Controlled fleet
Source: UK Chamber of Shipping, Oxford Economics
DWT (000s)
No tonnage tax Tonnage tax
THE UK INTRODUCED A TONNAGE TAX IN 2000. BY 2012 THE UK
CONTROLLED FLEET HAD MORE THAN TRIPLED IN SIZE
19
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,0001
980
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
200
0
200
2
200
4
200
6
200
8
201
0
201
2
Controlled fleet Controlled fleet, 'No state aid' scenario
Source: UK Chamber of Shipping, Oxford Economics
DWT (000s)
No tonnage tax Tonnage tax
THE UK INTRODUCED A TONNAGE TAX IN 2000. BY 2012 THE UK
CONTROLLED FLEET HAD MORE THAN TRIPLED IN SIZE
20
-85%
FRANCE INTRODUCED A TONNAGE TAX IN 2003, AND SIMPLIFIED
ITS SOCIAL SECURITY EXEMPTIONS IN 2006
21
0
2,000
4,000
6,000
8,000
10,000
12,000
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
Controlled fleet Controlled fleet, 'No state aid' scenario
Source: ISL Bremen; counter-factual scenario estimated by Oxford Economics
DWT (000s)
Tonnage Tax No tonnage tax
-61%
GERMANY INTRODUCED A TONNAGE TAX AND A SEPARATE WAGE
RETENTION SCHEME IN 1999
22
-68%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,0001
994
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
Controlled fleet Controlled fleet, 'No state aid' scenario
Source: ISL Bremen; counter-factual scenario estimated by Oxford Economics
DWT (000s)
No tonnage tax Tonnage tax
SWEDEN INTRODUCED SOCIAL SECURITY AND INCOME TAX
INCENTIVES IN 2001, BUT HAS NOT INTRODUCED A TONNAGE TAX
23
0
5,000
10,000
15,000
20,000
25,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
198
0
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
200
0
200
2
200
4
200
6
200
8
201
0
201
2
Controlled fleet, 000 DWT
Flagged fleet, 000 DWT
Flagged fleet (left scale) Controlled fleet (right scale)
Source: UNCTAD, ISL Bremen
1.1% of world fleet under
Swedish flag
0.1% of world fleet under
Swedish flag
APPLYING THIS APPROACH TO NINE COUNTRIES SUGGESTS THE ECONOMIC
CONTRIBUTION OF THE EU SHIPPING INDUSTRY COULD HAVE BEEN 50 PER CENT
LOWER IN 2012 WITHOUT STATE AID MEASURES
24
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
GVA GVA(counter-factual)
Employment Employment(counter-factual)
InducedIndirectDirect
GVA, €m Employment
Source: Oxford Economics
MARITIME ACADEMIES
IT IS ESTIMATED THAT THERE WERE AROUND 38,000 STUDENTS/CADETS IN
MARITIME ACADEMY–TYPE TRAINING ACROSS THE EU AND NORWAY IN 2012
26
+11% since 2004
SUMMARY
27
THE ECONOMIC VALUE OF THE EU SHIPPING INDUSTRY
28
EXTENDING THE ANALYSIS TO THE WIDER
MARITIME CLUSTER – AN EXAMPLE FROM THE UK
SIMILAR TECHNIQUES CAN BE USED TO ASSESS THE IMPACTS OF
THE WIDER MARITIME CLUSTER
• In 2015, Maritime UK asked Oxford Economics to assess the
economic contribution of the UK maritime cluster
• Defined to include:
• Shipping
• Ports (cargo handling, warehousing, storage, transport services,
shipbuilding and repair undertaken within UK ports)
• Maritime business services (ship broking, insurance, maritime
financial and legal services, classification societies)
30
7% 0%11%
61%
11%
2%8%
7%1%
9%
60%
16%
1%6%
Manufacturing
Wholesale and RetailTrade, Repairs
Construction
Transport and Storage
Financial and Insurance
Professional, Scientific andTechnical
Public Admin, Defence andSocial Services
GrossValue Added Employment
WE USED DETAILED LOCAL DATA TO ESTIMATE EMPLOYMENT
WITHIN A SAMPLE OF PORTS
31
118,000 direct
jobs after
scaling (inner
ring)
£7.7 billion in
direct GVA
(outer ring)
INCLUDING MULTIPLIER EFFECTS, WE ESTIMATE THAT PORTS
CONTRIBUTED £19 BILLION IN GDP AND 344,000 JOBS IN 2013
32
0
50
100
150
200
250
300
350
400
0
2
4
6
8
10
12
14
16
18
20
Contribution to GDP (LHS axis) Employment (RHS axis)
Direct Indirect Induced£ billion 000 jobs
IDENTIFYING MARITIME BUSINESS SERVICES ACTIVITY POSES
CHALLENGES
• Maritime business services typically do not have their own category
within official statistics
• Our estimates of the industry’s direct employment and GDP
contribution therefore relied on detailed research by the industry. That
in turn used a survey, interviews and industry yearbooks to identify
relevant firms and the size of those firms
• Total direct employment was estimated to have been just over 10,000
workers in 2013, slightly more than in cargo handling
33
Shipbroking39%
Insurance services
37%
Legal services15%
Classification8%
Financial services
1%
INCLUDING MULTIPLIER EFFECTS WE ESTIMATE THAT MARITIME BUSINESS
SERVICES CONTRIBUTED £3.5 BILLION TO UK GDP IN 2013
34
0.0
0.5
1.0
1.5
2.0
2.5
Insuranceservices
Ship broking Legalservices
Financialservices
Classification
£ billion
Induced
Indirect
Direct
IN TOTAL, THE MARITIME CLUSTER SUPPORTED £22 BILLION IN GDP
AND 489,000 JOBS IN THE UK ECONOMY IN 2013
35
0
50
100
150
200
250
300
Ports Shipping Business services
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
GDP (Left scale) Employment (Right scale)
Source: Oxford Economics
GDP, £ million Employment, 000s
All data shown in tables and charts is Oxford Economics’ own data, and is
copyright © Oxford Economics Ltd, except where otherwise stated and cited in
footnotes.
The modelling and results presented here are based on information provided by
third parties, upon which Oxford Economics has relied in producing its report and
forecasts in good faith. Any subsequent revision or update of those data will affect
the assessments and projections shown.
To discuss the report further please contact:
Andrew P Goodwin: apgoodwin@oxfordeconomics.com
Oxford Economics
Broadwall House, 21 Broadwall, London, SE1 9PL, UK
Tel: +44 207 803 1400
36
DECEMBER 2016
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