The economic value of the EU shipping industry. Andrew P Goodwin

Transcription

1 The economic value of the EU shipping industry Andrew P Goodwin 2 nd April 2014

2 Introduction

3 Shipping is a vital facilitator of world trade 135 % Increase in world GDP in the last two decades 180 % Increase in world seaborne trade over the same period 3.5 trillion Value of EU s trade with the rest of the world in /6 EU share of world goods trade (external trade flows with RoW) 90% IMO estimate of the value of world trade carried by sea 3

4 Study objectives 1. Analyse the recent evolution of the EU fleet 2. 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 3. Estimate the impact of measures permitted under the Community guidelines on state aid to maritime transport 4. Review the contribution of maritime academies 4

5 Definitions The shipping industry 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 EU + 5

6 The EU fleet

7 Between the start of 2005 and the start of 2014, EU controlled tonnage expanded by more than 70 per cent Position on 1 Jan Index, 2005= m GT 660m DWT 23,000 vessels Source: Clarkson Research Services Ltd. Number of vessels Gross tonnage Deadweight tonnage 7

8 The EU controls 40 per cent of world gross tonnage and 39 per cent of world deadweight tonnage 45 Per cent Number of vessels Gross tonnage Deadweight tonnage Source: Clarkson Research Services Ltd. 8

9 Greece has the largest controlled fleet within Europe, equivalent to 36 per cent of gross tonnage. Germany represents a further 21 per cent Greece Germany Norway Italy Denmark UK Netherlands France Belgium Sweden Cyprus Finland Spain Poland Croatia Other Gross tonnage (millions) Deadweight tonnage (millions) Source: Clarkson Research Services Ltd. 9

10 The EU controlled fleet is dominated by three types of vessel LNG & LPG Roll-on, Roll-off Ferries Cruise Other Chemical tankers Pure car carriers Bulkers Multi-purpose vessels Offshore 28% Container ships 25% 25% Oil tankers Source: Clarkson Research Services Ltd. 10

11 Whilst the EU controls 40 per cent of the world fleet overall, the share is much greater for some types of vessel Roll-on, Roll-off Container ships Ferries Multi-purpose vessels Oil tankers Chemical tankers Offshore Bulkers Pure car carriers LNG & LPG Cruise EU as % of world gross tonnage Other Source: Clarkson Research Services Ltd. Average 11

12 The strongest growth between 2005 and 2014 was recorded amongst offshore vessels. The EU now controls 37 per cent of the world offshore fleet % change in gross tonnage, Offshore Container ships LNG & LPG Cruise Bulkers Pure car carriers Oil tankers Chemical tankers Ferries Multi-purpose vessels Roll-on, Roll-off Other Source: Clarkson Research Services Ltd. 12

13 per cent of the world fleet was under the flag of an EU country in % million DWT As % of world (left scale) DWT, 000s (right scale) Source: UNCTAD 13

14 Eight of the top 25 largest operated fleets in the world belong to EU countries. Three EU countries are in the top five Japan Greece China Germany Denmark South Korea U.S.A. Singapore Hong Kong Taiwan Switzerland Norway Bermuda U.K. France Italy Turkey Canada Russia India Indonesia Malaysia Sweden Brazil Iran Source: IHS Fairplay Gross tonnage (millions)

15 Economic impact analysis

16 The study assesses the economic impact of the EU shipping industry across three channels Direct impact e.g. Freight services Passenger services Towing & dredging Service and offshore support activities Renting and leasing Indirect impact e.g. Ship building Ship repairs Port services Insurance Shipping-related financial and legal services, etc. Induced impact e.g. Food and beverages Other consumer goods Restaurants Recreation services etc. Total economic impact 16

17 The economic contribution of shipping has been assessed across three metrics Gross value added contribution to GDP The contribution to the economy of each individual producer, industry or sector. Aggregated across all industries to form the basis of GDP Employment Measured on a headcount basis Tax revenues Employee income taxes Employee and employer social security contributions Tonnage and corporation tax VAT on employees consumption

18 The study has drawn on existing research, official statistics and the Oxford Economics Global Input-Output model Direct impact Previous national studies Eurostat national accounts and Structural Business Statistics datasets Estimation to align time periods and sector definitions Indirect impact Induced impact 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 crosscountry impacts amongst other EU countries

19 The EU shipping industry is estimated to have directly employed 590,000 people in 2012 This means shipping employs more people than Travel agents & tour operators Forestry & logging Air transport 530, , ,000 19

20 Almost two-thirds of shipping employees are employed in freight transport 400, , , , , , , , ,000 50,000 0 Freight transport (incl. towing & dredging) Passenger transport 54,000 Service & offshore support vessels 7,000 Renting & leasing Source: Oxford Economics 20

21 In 2012, the EU shipping industry is estimated to have directly contributed 56 billion to EU GDP 47bn to EU GDP in % 56bn to EU GDP in GDP per worker EU average 53,000 Shipping 88,000 Water supply 86,000 Film & TV 84,000 Air transport 71,000 Land transport 44,000 21

22 The total GDP contribution of the European shipping industry in 2012 is estimated to have been 145 billion bn 145bn Direct Indirect Induced Total Source: Oxford Economics 22

23 The shipping industry also supported employment for an estimated 2.3 million people 2, s 2.3m 2, ,500 1,000 1,126 1, Direct Indirect Induced Total Source: Oxford Economics 23

24 The shipping industry has significant multiplier effects across the wider EU economy 1m 1.6m For every 1 million the shipping industry contributes to GDP itself, it creates another 1.6 million elsewhere in the economy For every direct job the shipping industry creates, another 2.8 are created elsewhere in the EU economy 24

25 The shipping industry supported total tax revenues of around 41 billion in 2012 Tax revenues estimated bn 41bn Employee income taxes Employee and employer social security contributions Tonnage and corporation tax VAT on employees consumption Direct Indirect Induced Total Source: Oxford Economics 25

26 The impact of measures permitted under the Commission s guidelines on state aid to maritime transport

27 Over and above its role in facilitating trade, the shipping industry has a number of unique features and wider benefits for the EU Inherent mobility Core of the wider maritime cluster Security of energy supply Military support & peacekeeping Safety standards Trained seafarers 27

28 The UK introduced a tonnage tax in By 2012 the UK controlled fleet had more than tripled in size 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 DWT (000s) No tonnage tax Tonnage tax 0 Controlled fleet Source: UK Chamber of Shipping, Oxford Economics 28

29 The UK introduced a tonnage tax in By 2012 the UK controlled fleet had more than tripled in size 40,000 35,000 30,000 25,000 20,000 DWT (000s) No tonnage tax Tonnage tax 15,000 10,000-85% 5,000 0 Controlled fleet Controlled fleet, 'No state aid' scenario Source: UK Chamber of Shipping, Oxford Economics 29

30 France introduced a tonnage tax in 2003, and simplified its social security exemptions in ,000 DWT (000s) No tonnage tax Tonnage Tax 10,000 8,000 6,000-61% 4,000 2,000 0 Controlled fleet Controlled fleet, 'No state aid' scenario Source: ISL Bremen; counter-factual scenario estimated by Oxford Economics 30

31 Germany introduced a tonnage tax and a separate wage retention scheme in , ,000 DWT (000s) No tonnage tax Tonnage tax 100,000 80,000-68% 60,000 40,000 20,000 0 Controlled fleet Controlled fleet, 'No state aid' scenario Source: ISL Bremen; counter-factual scenario estimated by Oxford Economics 31

32 Sweden introduced social security and income tax incentives in 2001, but has not introduced a tonnage tax 8,000 Flagged fleet, 000 DWT Controlled fleet, 000 DWT 25,000 7,000 6, % of world fleet under Swedish flag 20,000 5,000 4, % of world fleet under Swedish flag 15,000 3,000 10,000 2,000 1,000 5, Flagged fleet (left scale) Controlled fleet (right scale) Source: UNCTAD, ISL Bremen 32

33 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 160,000 GVA, m Employment 2,500, , , ,000 80,000 60,000 40,000 20,000 Induced Indirect Direct 2,000,000 1,500,000 1,000, ,000 0 Source: Oxford Economics GVA GVA (counterfactual) Employment Employment (counterfactual) 0 33

34 The contribution of maritime academies

35 It is estimated that there were around 38,000 students/cadets in maritime academy type training across the EU and Norway in % since

36 Summary

37 37 The economic value of the EU shipping industry