Socio-economic indicators of marine-related
activities in the UK economy
Socio-economic indicators of marine-related
activities in the UK economy
Project OSR 07-04
Final Report
David Pugh
Marine Science Advisor
3, Deeside Court
Chester CH3 5AU
UK
London: TSO
March 2008
Co-published by TSO (The Stationery Office) and available from:
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© Crown Copyright 2008
All rights reserved.
Published by The Crown Estate on behalf of the Marine Estate.
The study was co-funded by The Crown Estate, Associated British Ports and Oil & Gas UK.
This report is available from The Crown Estate website www.thecrownestate.co.uk
Dissemination Statement
This publication (excluding the logos) may be re-used free of charge in any format or medium.
It may only be re-used accurately and not in a misleading context.
The material must be acknowledged as Crown Estate copyright and use of it must give the title of the
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Disclaimer
The opinions expressed in this report do not necessarily reflect the views of The Crown Estate and
The Crown Estate is not liable for the accuracy of the information provided or responsible for any use of
the content.
Author’s Disclaimer
This Report has been prepared in good faith from accessed data. However, the author assumes no
responsibility and shall have no liability, consequential or otherwise, of any kind arising from this information
or any part thereof.
Suggested Citation
Pugh, D. Socio-economic Indicators of Marine-related Activities in the UK economy.
The Crown Estate, 68 pages.
March 2008.
ISBN: 978-1-906410-01-8
First published 2008
Printed in the United Kingdom by The Stationery Office.
Contents
Contents
Foreword by Roger Bright
iii
Acknowledgements
iv
Executive summary
v
Introduction
1
Methodology and data sources
2
Analyses of economic sectors
5
Fish
6
Oil and gas
9
Aggregates
12
Ship and boat building and repairs
14
Equipment
15
Marine renewable energy
18
Construction
20
Shipping operations
21
Ports
23
Navigation and safety
25
Cables
28
Business services
30
Licence and rental
32
Research and development
33
Marine environment
37
Defence
39
Leisure and recreation
40
Education
43
Summary of activities
45
Services that are not economically charged
49
Towards a marine activities indicator
50
Other national studies
52
General References
55
Annex 1 Marine activities in SIC-07
56
Socio-economic indicators of marine-related activity in the UK economy
i
Foreword
Foreword by Roger Bright
The Crown Estate’s Marine interests include over 55% of the UK’s foreshore,
the beds of tidal rivers and estuaries, and almost all of the seabed out to the
12 nautical mile territorial limit around the UK. They also include the rights to
explore and utilise the natural resources of the UK continental shelf, with the
exception of oil, coal and gas. Our Marine Estate, therefore, has a diverse
range of interests embracing a broad spectrum of marine-related activities
which are pursued within The Crown Estate’s core values of commercialism,
integrity and stewardship.
As a foundation for more intensive studies of the sustainability and
commercial characteristics of its interests, The Crown Estate has been
pleased to be able to initiate this update of the economic value to the UK
economy of marine-related activities. We are delighted that two coparticipants in the ‘Seabed User and Developer Group’, namely Associated
British Ports and Oil & Gas UK, have provided financial support for this study
so that it could embrace the full spectrum of UK marine-related activities.
This report demonstrates the significant economic contribution that marine
activities make to the UK and to providing employment within the UK. The
report also reminds us of the extraordinary diversity of marine-related
activities and provides an accessible guide to their relative contribution.
The results of the study, contained within this report, will have wider uses
than assisting the sponsors with their future business planning. It will be
valuable as a reference source in evaluating the ‘productive’ nature of our
seas: and it will assist the planned future assessments of the state of UK
seas within the Government’s vision of achieving clean, healthy, safe,
productive and biologically diverse seas for future generations to use and enjoy.
Roger Bright.
Chief Executive, The Crown Estate
Socio-economic indicators of marine-related activity in the UK economy
iii
Analyses of economic sectors - Fish
Acknowledgements
Acknowledgements
In addition to the published and Internet sources of data, information has also been provided by many
knowledgeable individuals, including:
Sam Baird (Department of Fisheries and Oceans, Canada)
Peter Barham (Associated British Ports)
Mick Borwell (Oil and Gas, UK)
Karen Boss (British Marine Federation)
Mike Cowling (The Crown Estate)
Martyn Cox (The Scottish Government)
Tom Cuffe (Office for National Statistics)
Gordon Edge (BWEA)
Jeremy Gardner (British Telecom)
Bob Greenfield ( UK Cable Protection Committee)
Trevor Guymer (IACMST)
Regis Kalaydjian (Chief Economist, IFREMER, France)
Judith Kildow (USA, National Ocean Economics Program)
Alistair Mcilgorm (Director, National Marine Science Centre, Coffs Harbour, Australia)
Stephanie Merry (Renewable Energy Association)
Colin Morris (Department for Transport)
John Murray (Society of Maritime Industries)
Mark Russell (British Marine Aggregate Producers Association)
Jacky Wood (National Oceanography Centre, Southampton)
iv
Marine Estate Research Report
Executive summary
Executive
summary
This report estimates the economics and employment statistics for marine
activities in the UK economy. For 2005-6, direct marine-related activities
comprised 4.2% of the total UK Gross Domestic Product, at basic prices, to
a total value of £46bn. Of the total UK employment, 890,000 jobs were
marine-related, 2.9% of the total. This gives a total direct and indirect
contribution of marine activities to the UK economy of between 6.0% and 6.8%.
The scope is taken to include those activities which involve working on or in
the sea. Also those activities that are involved in the production of goods or
the provision of services that will themselves directly contribute to activities on
or in the sea. This restricted definition is based on the understanding that the
figures produced are minimum estimates of the economic importance of
marine resources and activities.
The contributing marine activities were split into 18 sectors. The choice of
these sectors fitted naturally into the way marine activities are structured, and
has some general international acceptance (see international comparisons
chapter, page 52). However, they do not always match sectors used in
National statistics. By far the biggest sector was the production of oil and gas
offshore; extractive industries including also aggregates, fish and renewable
energies, formed 48% of all marine activities in GDP. Oil and gas extraction as
the leading sector, was followed by ports, shipping operations, leisure and
recreation, and equipment manufacture. The fastest growing sectors are
thought to be marine equipment, boat building, cruising and renewable
energy production.
While some of the economic marine sectors, for example oil and gas
production, are clearly identified in the data collected and published by the
Office for National Statistics, others are very difficult to isolate, notably
equipment, ports, construction and telecommunications. It should be
emphasised that this presentation is a systematic assembly of available
marine-related data. It is not a detailed, modelling economic analysis, which
would have been a much more extensive undertaking.
The report also discusses the feasibility of generating a regular marine
economics indicator, as is now being attempted for the USA and Canada.
Socio-economic indicators of marine-related activity in the UK economy
v
Introduction
Introduction
The objective of this study, commissioned under the auspices of
The Crown Estate, and co-funded by Associated British Ports and Oil and
Gas UK, is to provide a review of available data and information on marinerelated activities in the UK economy. It is intended to:
(i) be a reference source for marine spatial planning
(ii) assist the derivation of marine socio-economic objectives in the context of
sustainable development
(iii) contribute to the work of the Productive Seas Evidence Group (PSEG) and
the ongoing UK and international assessments of the state of UK seas
The first part of the analysis is to define what is included in the scope of
“marine-related activities”. For the purpose of this report we use a relatively
narrow definition, as also used in earlier UK analyses, and similar to definitions
used in analyses in other countries.
The scope is taken to include those activities which involve working on or in
the sea. Also those activities that are involved in the production of goods or
the provision of services that will themselves directly contribute to activities on
or in the sea. For example, in the case of the oil and gas sector, only the
landed values are included. For fisheries the processing has been included,
because of its traditional close association with the ports. There are some
other slight exceptions, which will be justified individually in the text. In
detailed discussions on the individual sectors, some indication is given of the
wider economic implications. This restricted definition is based on the
understanding that the figures produced are minimum estimates of the
economic importance of marine resources and activities.
Socio-economic indicators of marine-related activity in the UK economy
1
Methodology and data sources
Methodology
and data sources
The idealised approach has been, by using
acknowledged and the latest reliable primary
sources, to assemble a set of analyses of the
economic activities associated with specific
marine-related sectors and sub-sectors of the UK
economy. In many cases primary sources do not
specifically identify marine components within
broader economic sectors.
As a matter of policy, wherever possible, the report
relies on official Government statistics, either from
the Office for National Statistics, (ONS) or from
Departmental sources. Using official statistics has
the advantage of relatively easy access,
consistency, and the expectation that repeated
analyses of this type can look for trends in specific
sectors over several years.
Where primary data are not available, estimates are
attempted using explicit alternative techniques. In
many cases it has been necessary to estimate the
level of economic activity in a sector by other
approaches, for example, by accessing company
annual reports; by working with surveys by
associations and sector market analyses; and
consultations with knowledgeable individuals. For
these surveys the Internet has proved a much
more valuable source of information than was the
case for earlier surveys (Pugh and Skinner, 2002).
The central year for the study was chosen to be
the UK Financial Year, April 2005 to March 2006. A
later year would have suffered from a lack of
sufficient statistical information, as publication of
the statistics is inevitably delayed. If more recent
information was available at the time of preparing
this report, it has been referred to. In some cases
even 2005-6 was too recent and so data from the
most recent available year is used, and the reason
given. This is particularly important for the
“combined use” matrices (sometimes termed
“input-output” tables, or “supply and use” tables),
which shows the business transacted among 123
sectors of the UK economy, and which have been
valuable in deriving indirect statistics. These tables
can also be used to estimate the wider impact of
specific sectors. The latest available matrix from
the ONS is for 2004-5.
2
Marine Estate Research Report
Methodology and data sources
There are three standard approaches to estimating
GDP: measurements of expenditure, of incomes,
or of the total value of output of goods and
services in the economy. For this report the
adopted method of estimating the contribution to
the marine sector to GDP has been based on the
measurement of output values or turnover from
each activity; the totalled output is then reduced by
a value-added factor that varies between zero and
one. If specific data for the value added factors are
not available, these factors can sometimes be
estimated for the wider economic sectors, from the
combined use matrix (see above), produced by the
ONS.
Wherever possible the analyses have been
developed to include the following aspects of each
economic activity:
● Turnover
● Value added
● Exports
● Numbers employed
● Information on intensity / value of activity by
region, where appropriate
● Trends and potential for future growth
● Related impacts / consequences in the UK
economy
● Summary of sector data sources
A note on the methods of estimating a sector’s
contribution to the Gross Domestic Product may
be helpful. The GDP contribution is the sector’s net
output (turnover) less any goods or services it has
acquired from other economic sectors, or
imported. For example, the value of the gross
output of the shipbuilding industry includes the
value of the steel bought from the steel industry
and also the value of the services provided by
insurance, banking, advertising and so on. A large
proportion of the turnover is also spent purchasing
component parts such as engines and control
equipment that are themselves manufactured in
another marine sector. If the separate turnovers of
the two sectors are added, there will be double
counting, which will inflate the apparent value of
the final product to the GDP.
Given this uneven availability and reliability of the
data, and the finite resources available for the
survey some caveats are necessary. It must be
emphasised that the aggregated figures in the
report are only a general indication. It is a
systematic collection of available socio-economic
data; it is not a full modelling economic analysis. In
some cases, particularly for exports, and power
cables, it has not been possible to make even
rough estimates within the scope of this work.
The aggregated UK figures for marine-related
activities are then set in the context of the wider UK
economy.
This work has also benefited from discussions with
and by consultation with people leading similar
studies in the USA, Canada, Australia and France,
and some brief comparisons will be made. This
includes noting plans for the future regular
production of “score cards” or marine economic
indices in the USA and Canada.
Where appropriate the study has incorporated
information and techniques used previously in
Pugh & Skinner (2002). However, the sectors and
treatment are not identical and general direct
comparison is not possible. The previous report is
out of print, but available on the IACMST web site:
www.marine.gov.uk/publications/NEWMARSURV
ACRO.PDF
References to information sources that are specific
to a particular economic sector are included in the
individual sector accounts. More general
references are given at the end of the report.
Socio-economic indicators of marine-related activity in the UK economy
3
Analyses of economic sectors
Economic
sectors
These mainly follow the sectors used by Pugh and
Skinner (2002), which is generally consistent with
categories used in similar analyses in other
countries. However, there are some differences,
both because the range of statistics here is
broader, and also because the emphasis in this
survey is less directed to related science and
technology than in the 2002 analysis. This means
that the two reports are not directly comparable.
The sequence of presentation follows that of the
Standard Industrial Classification of Economic
Activities index 2007, within the constraints of the
definitions adopted for the economic marine
sectors. The decimal category for each activity in
SIC 2007 which most nearly match our marine
sectors is indicated at the start of each sector.
Fuller details of the marine constituents in SIC
2007 are given in Annex 1. SIC 2007 comes into
operation on 1 January 2008. This crossreferencing to SIC 2007 is intended to indicate
where future or more detailed sector analyses
should begin. This applies particularly to the semiautomatic generation of annual indicators, as
discussed in a later section.
Socio-economic indicators of marine-related activity in the UK economy
5
Analyses of economic sectors - Fish
Fish
Sea fisheries
(SIC (2007): 03.11; 03.21; 10.20)
In 2005 the fishing industry in the UK had 6,341
fishing vessels, with a further 381 vessels
registered in the Channel Islands and the Isle of
Man. Some 708 thousand tonnes of sea fish were
landed into the UK and abroad by the UK fleet with
a total value of £571 million. See Figure 1.
(03.11)
This sector includes traditional sea fishery activities,
fish farming, and also fish processing. Fish
processing is included here because it is
traditionally closely linked to dock landings, by
location, by ownership, and statistically.
The combined use matrix aggregates sea fishing
and fish farming into one sector ( sector 3). These
values are used in the analysis, and given in the
table at the end of this section. However, the two
are essentially different industries, with very
different characteristics and prospects. The
following discussion highlights these differences.
At the retail level there were approximately 13,000
fishmongers in the year 2005, including mobile fish
vans and market stalls. Eighty-five per cent in
volume and 80 per cent in value of chilled and
frozen products were sold through supermarkets.
This does not include canned produce. The
average consumption of fish per person per week
in the UK in 2004-5 was 158 grammes and the
average expenditure was 99 pence (£2.85 per
pound). For comparison, £4.94 was spent on
meat. Fish is also consumed in restaurants and in
take-away form from fish and chip shops. A small
proportion of the catch is used to make fish oils
and animal feeds.
Information on intensity / value of activity
by region
Fishing communities are distributed around the
coast, but especially in the southwest of England,
and on the east coasts of England and Scotland.
Trends and potential for future growth
The sea fishing industry employed 38,826 people
in 1948. Present levels are much lower. Threats to
some fish stocks mean that the industry operates
under quotas agreed through the European Union.
Fish landings and values by UK vessels to UK ports
are shown in the following graph. In 2005 the
average landed price was £961 per tonne.
Related impacts / consequences in the
UK economy
Sea fishing is a small and slowly declining part of
the UK economy. In 2005 it was about 3.4% of the
larger “agriculture, forestry and fishing” sector,
which in turn was about 1% of the total UK
economy.
Sources
● The ONS, and Marine Fisheries Agency UK
Sea Fisheries Statistics 2005.
www.mfa.gov.uk/statistics/ukseafish.htm
Figure 1: Fish landings in the UK by UK vessels
700
tonnes (thousands)
£ (millions)
600
500
400
300
200
100
0
1996
6
1998
2000
2002
2004
Marine Estate Research Report
Analyses of economic sectors - Fish farming
Figure 2: Annual salmon production
180
160
tonnes (thousands)
140
120
100
800
600
400
200
0
1985
1990
1995
Fish farming
(03.12)
Fish farming of salmon has been a major important
economic development in the Highlands and
Islands of Scotland over the past 30 years. There is
some trout farming in England and Scotland (about
£20m per annum turnover, but this is in freshwater,
and is excluded from this analysis). The figures
below are for “farm gate” prices. There is a
substantial food processing industry based on the
salmon, in Scotland, with a strong export element.
Turnover
The retail value is estimated at £318m for 2005
(FRS data), see Figure 2. There is also a growing
shellfish industry with a £5.4m turnover in 2006;
species farmed include oysters, scallops, and
mussels. Mussel production has increased by a
factor of 5 over the past decade
Gross value added
Assuming a value added factor of 0.55 (as used by
Pugh and Skinner (2002)) gives £177m gross value
added for the direct production process.
Exports
DTI gives £9m from hatcheries and fish farms
directly.
Exports of processed food from Scotland is
included in the data for fish processing (see below)
Numbers employed
Direct employment (FRS figures) for 2005 was 979,
down from a peak of 1,306 in 2002. However it is
estimated that indirectly 8,500 jobs are dependent
on the industry.
2000
2005
Information on intensity / value of activity
by region.
The industry is concentrated in the west and north
of Scotland. There is very little production outside
Scotland.
Trends and potential for future growth
The output has declined a little, but the market is
fairly steady over the medium term. There are
initiatives for farming other species. The British
Marine Finfish Association envisages that within the
next eight to 10 years, the UK can produce
annually up to 10,000 tonnes of halibut, up to
25,000 tonnes of cod and 5,000 tonnes of
haddock, creating 2,000 jobs with a first sale value
of £100m. Shellfish production is expected to grow
steadily.
Related impacts / consequences in the
UK economy
Although relatively small in UK terms, the locations
of the farms and their support for rural
communities is very important, and there are
substantial numbers of jobs and added value for
the Scottish economy.
Sources
● Scottish Salmon Producers’ Organisation
web site December 2005 Report
www.scottishsalmon.co.uk/economics/ec
onomics.asp
● Fisheries Research Service Statistics. ONS
www.scottishexecutive.gov.uk/Topics/Stat
istics/Browse/AgricultureFisheries/TrendAquaculture
Socio-economic indicators of marine-related activity in the UK economy
7
Analyses of economic sectors - Fish processing
Fish processing
(10.20)
The UK has a substantial fish processing industry
of around 573 businesses, which employ some
18,180 people.
Turnover
The Sea Fisheries analysis gives, for 2002, total fish
inputs to the processing sector: £1,853 m. Total
sales £2,719m.
Value added
For the combined fish and fruit-processing sector,
in the combined use matrix, the GVA is 0.34 of
turnover, giving £930m. However, as this is more
than the differences cited above, and allowing for
other production imported costs, it seems that the
factor will be less for the fish processing part of the
combined sector. If an average employee
compensation of £10k is assumed (£182m) and
the sector profit factor of 9% is added (£237m)
this gives a GVA of £419m.
Exports
£587m
Sources
● UK Sea Fisheries Statistics 2005
prepared by the ONS and the Marine
Fisheries Agency.
www.mfa.gov.uk/statistics/ukseafish.
htm
● Sea Fish Industry Authority March 2007.
Numbers employed
18180
Information on intensity / value of activity
by region
Factories are widely dispersed, with concentrations
close to traditional landing sites, notably around
Humberside and the Scottish fishing ports.
The economic impacts of the UK sea
fishing and fish processing industries: An
Input-Output analysis.
www.seafish.org/land/economics.asp?
p=fl
● The British Marine Finfish Association
maintains an informative web site.
www.bmfa.uk.com/index.htm
Table 1: Summary table for fisheries sector
Turnover
£m
Gross
added
value £m
Exports
£m
Number
employed
1,021
389
362
13,453
2,719
419
587
18,180
3,740
808
949
31,633
Sea
fisheries
Fish
2004
Fish
farming
2005
Fish
processing
Total
8
Marine Estate Research Report
Analyses of economic sectors - Oil and gas
Information on intensity / value of activity
by region
The oil industry has its centre in Aberdeen, with a
strong headquarters presence in London. There
are major pipeline landfalls at Sullom Voe in
Shetland; at the Flotta terminal in Orkney; the gas
terminal at St Fergus near Aberdeen which is
operated by Shell, ExxonMobil, Total and British
Gas, and is the largest in the UK, being supplied
from installations in the Shetland basin, Northern
and Central North Sea and also from the
Norwegian sector; the Forties pipeline system
which is owned by BP starts at the Forties Charlie
platform with landfall at Cruden Bay, near
Aberdeen; Easington, Yorkshire; and Bacton,
Norfolk.
Oil and gas
(SIC(2007) 06.10; 06.20; 09.10)
Offshore extraction of oil and gas is a substantial
industry that makes a very important contribution
to the UK economy. Resources in UK waters are
steadily declining, though exploration for new
sources continues vigorously. There is a large spinoff industry supplying goods and expertise to other
operating areas worldwide, as discussed in the
equipment sector. Statistics are readily available
from ONS.
Turnover
For 2005, the DTI (now DBERR) statistics give a
total income of £28,693m, which includes oil sales
at £16,656m; gas sales at £8,902m; natural gas
liquids at £1,684 m; and other income including
revenues from pipelines and terminals of £1,451m.
Value added
The ONS Blue Book, Table 2.3 gives a gross value
added at current basic prices of £19,845m.
Trends and potential for future growth
The production from the UK offshore areas is in
decline as reserves are progressively exhausted.
See Figures 3 and 4. It is expected that the UK will
be a net importer of oil and gas by 2010, but it may
happen before this. Importing energy supplies will
have a big effect on the balance of payments.
However, income to the oil companies continues to
increase as a consequence of rising oil prices. This
is particularly favourable as many of the
investments yielding today’s production were
justified when oil prices were much lower. The
offshore sector is sufficiently profitable to
encourage further investment in developing more
fields; in 2005, £4,831m was invested in further
developments.
Sources
● UKOOA Economic Report 2006
www.ukooa.co.uk/issues/economic/econ
06/index.cfm
From April 2007 UKOOA has been
reformed as “Oil and Gas UK”,
representing a wider range of sectional
interests.
Exports
The 2005 total exports taken from the ONS gives
£11,861m. The 2004 figure of £10,020m from the
combined use matrix shows oil and gas extraction
contributed exports £6,806m to European Union
and £3,214m to non-European Union countries.
● Business Monitor International. The UK Oil
Numbers employed
The UKOOA (now Oil and Gas UK) Economics
Report for 2006 estimates 290,000 people directly
employed in the industry and its supply chain, with
a further 90,000 jobs indirectly supported.
www.og.dti.gov.uk/information/bb_updat
es/appendices/UKCS_I_and_E_Annual.p
df
DTI is now the Department for Business,
Enterprise & Regulatory Reform.
and Gas Report.
www.businessmonitor.com/oilgas/uk.html
● DTI statistics.
Socio-economic indicators of marine-related activity in the UK economy
9
Analyses of economic sectors - Oil and gas
Figure 3: Gross gas production - UK offshore
140,000
cubic metres (millions)
120,000
100,000
80,000
60,000
40,000
20,000
0
1992
1994
1996
1998
2000
2002
2004
2006
Figure 4: Gross oil production - UK offshore
140,000
120,000
tonnes (millions)
100,000
80,000
60,000
40,000
20,000
0
1975
10
1980
1985
1990
1995
2000
2005
Marine Estate Research Report
Analyses of economic sectors - Oil and gas
Figure 5: Average oil prices
250
£ (per tonne)
200
150
100
50
0
1980
1985
1990
2000
2005
Turnover
Gross
value
added
Exports
Number
employed
£28,693m
£19,845m
£11,861m
290,000
Oil and
gas
2005
1995
Socio-economic indicators of marine-related activity in the UK economy
11
Analyses of economic sectors - Aggregates
Gross Value Added
This can be roughly estimated using the combined
use matrix in the UK Input-Output Tables for 2004,
for the whole sector, at 0.47 of turnover. Hence,
gross value added is estimated as £114m.
Exports
Based on the above calculations, assuming the
processed £12 per tonne, these are estimated at
£56m.
Aggregates
(SIC(2007): part of 08.12)
The production of sand and gravel by dredging
offshore contributes more than 20% of the material
used for construction in England and Wales. There
are substantial exports. In addition dredging
supplies material for beach nourishment and
regular contract fill (for example Cardiff Bay
Barrage, and Sizewell B nuclear power station).
Most processing takes place at the landing
wharves. The UK has the largest offshore dredging
industry in Europe and one of the biggest in the
world. Almost all dredging is done under licence
from The Crown Estate, which is the major seabed
minerals owner: royalties collected for dredging are
around £14m per year.
Turnover
In 2006 the total dredged was 24.3 million tonnes
of which 13.4 million was landed at wharves in
England and Wales for use as construction
aggregate; 6.7 million was landed at wharves on
Continental Europe for construction aggregate; and
4.2 million was used for beach replenishment and
contract fill. Based on 2006 production there are
two figures for turnover:
landed at the wharf (assuming £6 per tonne;
BMAPA communication) is £146m
out of the dock gate after processing (assuming
£12 per tonne) is £293m.
Prices in Continental Europe are about 30% lower
than in the UK, and the value of beach recharge
will be significantly lower than for processed
material. Assuming the beach material is
unprocessed and that all other material is
processed, weighting according to the landed
volumes for 2006 gives an estimated of turnover of
£242m.
12
Numbers employed
The fleet of some 27 marine aggregate dredgers
has about 475 staff and there is also 140
management staff. The wharves in the UK employ
a further 500 people (140 on the Continent) for
operations and processing. A further 544 are
employed as UK hauliers delivering to the point of
end use (160 on the Continent). Excluding the
continental employees, the total is 1,670
Activity by region
The main area of offshore sand and gravel landings
is the South East Region. One third of the South
East region’s primary aggregate requirements
come from marine sources. The 10 million tonnes
landed in the South East represents 75% of total
UK marine aggregate landings (13.4 million
tonnes), and 40% of total UK marine aggregate
production (24.8 million tonnes, including exports
and beach/contract fill). Of the 68 wharves in
England and Wales, 35 are in the Thames and at
South East ports. A third of all UK construction
takes place in the south east, where marine
aggregate supplies are so significant. South Wales
is uniquely dependent on marine-dredged sand
which accounts for 93 per cent of the market for all
construction sand and 97 per cent of building sand
supply. There are currently no landings in Scotland
or Northern Ireland.
Trends and potential for future growth
The supply of marine dredged sand and gravel for
UK construction has been remarkably stable since
the early 1970s. See Figure 6.
In most regions the annual volume landed is much
less than the maximum allowed under the license
terms. Large construction projects in the South
East can increase consumption (for example the
Channel Tunnel Rail Link, and prospectively, the
Thames Gateway port development). Demand for
exports is expected to grow as Continental land
supplies become exhausted. Demand for beach
nourishment material varies from year to year
depending on what projects are currently being
undertaken. Climate change may increase the
demand for protection against coastal flooding,
which in turn may call for more soft engineered
defences.
Marine Estate Research Report
Analyses of economic sectors - Aggregates
Figure 6: Landings of marine dredged sand and gravel, 1955–2006
(from BGS Report for BMAPA, 2007)
25
tonnes (millions)
20
15
10
5
0
1950
1960
1970
Related impacts / consequences in the
UK economy
The principle user of UK landed sand and gravel is
the construction industry, which gets about 21% of
its sand and gravel supply in England and Wales
from marine sources. In 2005, 79% of marine
aggregate landings were used in the production of
concrete and concreting products. Overall in 2004
31,000 people were employed in the manufacture
of concrete products for construction purposes,
and of ready-mix concrete. In 2005 the
construction industry accounted for 6% (£63bn) of
the total UK GDP.
1990
2000
2010
Sources
● The British Marine Aggregate Producers
Association (Mark Russell)
www.bmapa.org/key.htm
● The Office for National Statistics, Annual
Abstract of Statistics, Table 22.19
● The strategic importance of the marine
aggregate industry to the UK. Report
prepared for BMAPA by the British
Geological Survey. 2007
Turnover
Gross
value
added
Exports
Number
employed
£242m
£114m
£56m
1,670
Aggregates
2006
1980
Socio-economic indicators of marine-related activity in the UK economy
13
Analyses of economic sectors - Ship and boat building and repairs
Numbers employed
Shipbuilding 25,000 people;
Boat building 10,000 people.
Information on intensity / value of activity
by region
Shipbuilding has ceased in many traditional areas,
but continues on the Clyde, in Barrow and other
places, especially for naval construction. The four
centres for the powerboat industry are: the south
coast, particularly around Poole; the Southwest;
the Norfolk Broads; and the Midlands.
Trends and potential for future growth
Strong competition from Eastern Europe and the
Far East has made commercial shipbuilding a
highly challenging market for European shipyards,
and there are few remaining large UK shipyards
operating in the commercial sector. However, there
is a large naval shipbuilding programme expected
in future years for the Royal Navy, and the UK has
large naval yards in Portsmouth, Plymouth, the
Clyde, Barrow and Rosyth.
Ship and boat
building and
repairs
(SIC(2007) 30.11; 30.12; 33.15)
The DTI (now DBERR) sector analyses identify two
component sub-sectors: shipbuilding and repair;
and boat building. Government statistics on
shipbuilding are reasonably accessible. Note that
the DTI sector figures are slightly different from
those in the 2004 combined matrix. Boat building
is covered in more detail in the statistical analyses
of the British Marine Federation (BMF).
Related impacts / consequences in the
UK economy
The industry includes the growth areas of both sail
and motor vessels. These range from small day
boats to super-yachts (private ocean-going leisure
craft over 24 metres in length). The super-yacht
sector is becoming increasingly important to the
marine industries in the UK, as it is an expanding,
high value added market.
Turnover
Shipbuilding £1.95 billion; Boat building £770 m
(both for 2004, from the DTI sector analysis, which
is used rather than the combined use matrix, as it
separates ships and boat building).
Sources
● DBERR web site:
www.dti.gov.uk/sectors/aerospacemari
nedefence/marine/shipbuilding/page39
265.html
Value added
Shipbuilding £912 m; Boat building £311 m.
● British Marine Federation (2006). UK
Exports
Shipbuilding exports from DTI sector analyses were
£237m in 2005.
Leisure and Small Commercial Marine
Industry. Key Performance Indicators
2005/6.
● British Marine Federation (2005).
Economic benefits of the UK leisure
boating Industry.
BMF give exports of £446m for boat manufacture
in 2005-6. Of this total £180m was to the Eurozone,
and £108m to North America. The DTI analyses
give £698m.
Table 2: Summary for the shipbuilding and boat building sector
Ship and
boat
building
14
Turnover
£m
Gross
added
value £m
Exports
(2005)
£m
Number
employed
2004
Shipbuilding
1,950
912
237
25,000
2004
Boat building
770
311
698
10,000
Total
2,720
1,223
935
35,000
Marine Estate Research Report
Analyses of economic sectors - Marine equipment and materials
Supply to the offshore oil
and gas industry
A recent survey by Experian, published in October
2006 by UKOOA (now Oil and Gas UK) has looked
at the export market for the UK offshore operators
supply chain. They conducted telephone interviews
with 235 companies in the supply chain. At the
same time they gathered related information on
turnovers and employment.
Marine
equipment
and materials
(SIC(2007): widely distributed in
manufacturing classes)
The total marine manufacturing sector in the UK
includes the areas of marine equipment, boat
building, shipbuilding and ship repair. Boat building,
shipbuilding and ship repairs are covered
elsewhere in this report and are separately
identified in the ONS analyses.
However, marine equipment and specialized
materials for marine applications are hidden in the
wide range of general manufacturing
classifications. It is difficult to separate the marine
elements from these manufacturing statistics. As a
result, it is probable that previous analyses have
underestimated the contribution of equipment and
materials to the marine-activities economic
aggregations.
The industry provides equipment for commercial
vessels, naval ships and leisure boats, and also for
the offshore energy industry, worldwide. Equipment
includes engine systems, electronics and deck
gear. Occasional reports dealing with equipment
for the three components of the user chain are
available. On this basis it is possible to look at oil
and gas; shipbuilding; and boat building,
separately, and to make a rough aggregation.
Turnover
UK based companies operating in the oil and gas
supply chain reported turnover in 2005 of £40bn,
£14.83bn of which was oil and gas related. They
estimate that 35% of the oil and gas related activity
is in the provision of products, equipment and
materials. Assuming this ratio holds for turnover we
get £5.19bn.
Value added
Assuming a gross value added factor of 0.42 (from
the combined use tables for 2004, category 63,
“general purpose machinery”) we get £2.18bn.
Exports
Of the supply chain £15bn turnover, 27% (£4bn) is
accounted for by direct exports from the UK based
companies. £2.2bn is from foreign owned
companies and £1.7bn of export sales are from UK
owned companies.
Numbers employed
The oil and gas supply chain has been estimated
to support 260,000 jobs with a possible 100,000
further jobs for the export market. Assuming 35%
of the employment total are in equipment and
materials, gives 126,000 for this sector of our
analyses.
Information on intensity / value of activity
by region
Activities are distributed throughout the UK. 40%
of jobs in the supply chain are estimated to be
located in Scotland.
Trends and potential for future growth
The industry is expecting increases in sales over
the coming years, especially in the export markets.
Sources
● Sizing the Export market of the UK
Offshore Operators Supply Chain.
October 2006, by Experian for UKOOA
(available on the Oil and Gas UK web
site.
Socio-economic indicators of marine-related activity in the UK economy
15
Analyses of economic sectors - Marine equipment and materials
Supplies to shipbuilding
and repairs
UK supply of equipment to the global shipbuilding
industry is acknowledged to be one of the most
important and comprehensive in the world. One
major company, Roll-Royce marine had a turnover
of £1,097m in 2005, with 7,200 employees, and
orders for £17,000m on the books. However,
much of this turnover relates to overseas activities
and production. Identifying a separate UK
component is very difficult.
A good qualitative assessment is provided by a
special Foreign and Commonwealth Office
publication from 2000. Direct discussion with the
Chief Executive of the Society of Maritime
Industries (SMI), John Murray, has been very
helpful.
Turnover
The ONS combined use matrix for 2004, for
category 78 (ship and boat building and repairs)
has a total turnover of £2,828m, as discussed in a
separate section of this analysis. Supply to this
sector from the materials and equipment sectors
was £1,158m from which the boatbuilding figures
below must be deducted (note that the years are
different 2004 £1,158m; and 2005/6 £775m;
difference is approximately £383m). This is supply
only to the relatively small UK industry, and exports
must be added. A rough estimate (SMI, personal
communication) suggest that 80% of the turnover
is exported. Scaling accordingly gives an annual
turnover of £1,915m turnover.
Sources
● ONS
● Britain’s marine equipment industry,
published by the FCO, with support form
the DTI and the industry. March 2000. No
update is available; the report
concentrates on the supply to
shipbuilding.
● Direct discussions with the Society of
Maritime Industries.
Value added
Assuming the average manufacturing sector factor
to convert turnover to GVA of 0.42 gives £804m.
Exports
Using the 80% of turnover factor gives £1,532m.
Numbers employed
This is very difficult to estimate, but based on the
turnover and employment levels for the oil and gas
supply sub-sector and the boatbuilding sub-sector,
of £41,000 turnover per employee, gives an
estimated employment of 46,000.
Information on intensity / value of activity
by region
Generally distributed throughout the UK, with
engine manufacture in the Midlands.
Trends and potential for future growth
This is seen as a growing industry, especially for
exports, despite the decline of the traditional UK
shipbuilding industry.
16
Marine Estate Research Report
Analyses of economic sectors - Marine equipment and materials
Supplies to boat building
The British Marine Federation (BMF, 2005 pg 7)
analyses identify the supply of equipment and
materials separately from the boatbuilding
activities.
Turnover
Including manufacture and the supply chain,
£775m.
Value added
Assuming 36.7% for the sector as given by BMF,
£284m.
Exports
£230m.
Sources
Numbers employed
9,688
● Competitive Analysis of the UK Marine
Information on intensity / value of activity
by region
Mainly on the south coast, but generally distributed
for engines and electronics.
Trends and potential for future growth
A strong growth area.
Equipment Sector, First Marine
International 2001. (updated figures not
available).
● British Marine Federation (2006). UK
Leisure and Small Commercial Marine
Industry. Key Performance Indicators
2005/6.
● British Marine Federation (2005).
Related impacts / consequences in the
UK economy
The sector has many SMEs (small and medium
sized enterprises), which occupy niche market
positions. It also has world-leading UK
manufacturers with a significant international
presence. The exports of the marine sector
contribute greatly to the UK's overall exports
Economic benefits of the UK leisure
boating Industry.
Table 3: Summary for the equipment and materials sector
Equipment
and
materials
Turnover
£m
Gross
added
value £m
Exports
£m
Number
employed
2005
For oil
and gas
production
5,190
2,180
4,000
126,000
2005
For
ship building
1,915
804
1,532
46,000
2005
For
boat building
775
284
230
9,688
Total
7,880
3,268
5,762
181,688
Socio-economic indicators of marine-related activity in the UK economy
17
Analyses of economic sectors - Marine renewable energy
The other areas of potential substantial
contributions of renewable offshore energy are
wave and tidal stream power. A small 500kW wave
generator on Islay, west of Scotland, has been in
operation for several years. A 1MW tidal current
turbine is to be installed, as 5-year pre-commercial
pilot project, in Strangford Lough, Northern Ireland,
following a 3-year 300kW trial off north Devon.
About 10-15% of the known global tidal stream
energy resource is in UK waters. Wave and tidal
stream energy could contribute 15 to 20 % of the
total current UK energy consumption.
Marine
renewable
energy
(SIC(2007): part of 35.11)
This is a new, rapidly growing, marine economics
sector which will become increasingly important.
The figures for 2005-6 have been massively
overtaken by recent developments. Between 1996
and 2003 the use of renewable sources of energy
increased at 14.5% per year. From 2003 to 2005
the increase was 22% per year. In 2005,
17,000GWh were produced from renewable
resources, the equivalent to more than 4m tonnes
of oil. The Government has set a target of 10% of
electricity supply from renewable energy by 2010.
In 2005, 4% of the UK's electricity supply came
from eligible sources of renewable energy. The
offshore component of this growth is supported by
the Government, as part of its policy to encourage
renewable sources of energy generation.
The main and immediate prospect for offshore
renewable energy generation is offshore wind
turbines. North Hoyle off the North Wales coast
was the first UK major offshore wind farm. Built in
2003, it has an installed capacity of 60MW, from
30 wind turbines each rated at 2MW. By 2005-6
the total UK installed capacity was 214MW
offshore, compared with 1,123MW onshore.
Further developments are under construction or
planned.
18
Turnover
Assuming a 35% output from the installed capacity
of 2,124MW, sold at an average supply cost to UK
industry for 2005-6 of £50 per MWhour gives an
estimated turnover in a year of £32m.
Value added
Using the value added factor (0.30) for the whole
electricity-generating sector, applied to the
electricity generated offshore in 2005-6 gives
£9.6m.
Numbers employed
In the electricity-generating sector as a whole, only
8% of turnover is for staff costs. Most of the costs
are for capital and the supply of equipment.
Applying this to the estimated turnover of £32m
gives staff costs of £2.56m and about 50 staff at
£50k per employee.
Information on intensity / value of activity
by region
Although the West of Scotland is the best location
for sustained offshore winds, new constructions
are predominately around the coast of England,
near to the demands for power. This is because
there are additional issues and costs in preparing
the national grid network to receive and transmit
energy from remote areas. The Pentland Firth has
some of the strongest tidal streams around the UK.
Trends and potential for future growth
The political drivers for more energy from
renewable sources will continue, but eventually
wide uptake of offshore renewable energies must
depend on production costs being competitive
with conventional sources. Recent substantial
increases in the costs of electricity are likely to
continue in the long term, with short-term
fluctuations: wholesale electricity prices are
notoriously changeable. The key remains the
reduction in the costs of offshore energy
production. A recent Ernst and Young report for
DTI (now DBERR) gives current generation costs
between £120 and £280 per MWhour for offshore
wave energy; between £73 and £88 for offshore
wind generation; and £120 to £240 for tidal energy.
These are much higher than conventional costs,
but can be substantially reduced if large-scale
installations are built and operated routinely.
Marine Estate Research Report
Analyses of economic sectors - Marine renewable energy
However, installation costs for offshore wind farms
are rising rapidly; one estimate (Ernst and Young,
2007) suggests £1.66m per 1MW of installed
offshore wind capacity in 2015. Nevertheless, by
2008, the UK will be the leading country for
offshore wind energy production, and by 2011 the
installed UK capacity is planned to be 1645MW.
There are some delays because the global supply
of turbines is insufficient at present to meet
demand, which may keep production costs high
until 2010, but by 2020 cost may fall to £85 per
MWhour. In December 2007, the Government
announced major expansion and that it plans
33gW of offshore wind power for the UK by 2020.
Related impacts / consequences in the
UK economy.
Potentially, reliable resources of renewable energy
are very important for the UK economy, both
because of the political uncertainties associated
with the supplies of fuel oil from the Middle East
and Russia, but also because the offshore oil and
gas resources of the UK are in steady decline.
Sources
● Ernst and Young, 2007 costs of
electricity production report for DBERR.
www.berr.gov.uk/files/file39038.pdf
● Offshore wind market outlook.
Presentation by Andrew Reid, DouglasWestwood, May 2007.
www.allenergy.co.uk/UserFiles/File/2007
AndrewReid.pdf
● The British Wind Energy Association
www.bwea.com/
● DBERR
www.offshore-sea.org.uk/site/scripts/
documents_info.php?documentID=6&p
ageNumber=2
● The Renewable Energy
Associationhttp://www.r-ea.net/portal.fcm
Turnover
Gross
value
added
£32m
£10m
Renewable
energy
2005-6
Socio-economic indicators of marine-related activity in the UK economy
Exports
Number
employed
50
19
Analyses of economic sectors - Construction
Offshore wind power installations may be added to
this at an assumed 100MW in the year, and an
installation cost in 2005-6 of £1.16m per MW,
giving £116m. Of the estimated development
costs, most is for the purchase of turbines (51%)
and connections (25%). Foundations are about
16%. Equipment is a different sector in this report.
Assuming 24% is construction gives a turnover of
£28m.
The total of all three is £587m.
Value added
Scaling with the average value added factor from
the combined use matrix, (sector 88), for the
construction industry gives £223m.
Construction
(SIC(2007): 42.91)
This is a difficult sector to define and quantify a
marine component. It may be taken to include
harbour development, coastal works against
erosion and flooding, and construction of offshore
wind farms.
Turnover
Using Associated British Ports (ABP) as a
representative sample, and allowing for their share
of total UK port activity, of 22.6%, their capital
investment for 2004 and 2005 was £108m. Major
works include £59.5m for the Humber International
coal terminal, £27.5m for the Immingham ro-ro
terminal, and £30-35m for the Hull short-sea
container terminal. Scaling the ABP investment
gives an estimated total capital expenditure of
£245m.
Exports
British engineering companies are involved in the
design and construction of many marine structures
overseas, but it has not been possible to quantify
them. The major costs, materials and labour, would
fall locally; but design and management would be a
benefit to the UK economy.
Numbers employed
Scaling from the total construction industry
employment of 1.8m gives 6,200.
Trends and potential for future growth
These are capital investments that have very long
installation lifetimes. Major port developments,
including capital dredging, are anticipated (see
ports section). Several more wind farms are under
construction or planned. More and higher coastal
defences will probably be needed to address sea
level rise and climate change expectations.
For 2005-6 DEFRA announced investment in
coastal and land flood defences of £570m, to be
allocated through the Environment Agency and
directly to local authorities and internal drainage
boards. Major works include London tidal defences
and the Shoreham sea defences. Allowing half this
sum for “marine related” and increasing by 10% for
Scotland and Northern Ireland works gives a very
rough value of £314m.
Turnover
Gross
value
added
£558m
£228m
Construction
2005-6
20
Exports
Number
employed
6,200
Marine Estate Research Report
Analyses of economic sectors - Shipping operations
after removing shore and non-UK employment,
gives a total of 33,600, which is in fair agreement
with the DfT survey of UK seafarers.
Information on intensity / value of activity
by region
In 2005 the five biggest ports in order were Tees
and Hartlepool, Milford Haven , London, Forth and
Liverpool. In 1995 the first five in order were
London, Forth, Liverpool, Southampton and Milford
Haven. Tees and Hartlepool advancement is mainly
related to the outward movement of crude oil.
Shipping
operations
(SIC(2007): 50.10; 50.20)
Transport of goods by sea continues to be the
dominant mode for the carriage of UK international
trade, with freight lifted increasing from 369 million
tonnes in 1995 to 426 million in 2005. By
comparison, only 2.2m tonnes was carried by air,
less than 0.5% of sea freight by volume. By value,
the air transport is a much higher percentage. The
Channel Tunnel is responsible for about 4% of UK
international trade. Marine transport is covered in
the two SIC categories listed above.
Turnover
This is taken from the ONS combined use matrix
for 2004, section (95) on Water Transport as
£8,820m, assuming inland waterway transport is
only a very small part. (more recent analyses
suggest the figure may be higher than this-see
below).
Value added
From the ONS tables this was £3,399m in 2004.
Exports
International revenues for 2004 are listed at
£7,891m and expenditure at £4,021m.
Numbers employed
The Department for Transport (DfT) has published a
survey of UK seafarer statistics. In 2006 there were
about 28,100 UK seafarers working regularly at
sea, of which 13,600 were deck and engine
officers, 800 technical officers, 2,300 catering
officers, 10,400 ratings, and 1,100 trainees. Many
crew on UK vessels are not UK nationals. The
recent Oxford Economics survey, using data from a
survey of members of the Chamber of Shipping,
estimates that 98,000 people are directly employed
by the UK shipping industry. Of these, 9,500 work
ashore, and will in part be covered in the section
on Ports. 40% are non-UK ratings, and 16% are
non-UK officers. The Chamber of Shipping data,
Worldwide, sea freight in 2005 was 7.11bn tonnes.
The UK ports total handling is 8.2% of this. Global
growth from 2004 was 3.8%. UK shipping has
recovered strongly from the late 1990s, with
£11.6bn gross shipping revenues in 2005, up
nearly 150% from 2002. UK-owned shipping is
also increasing, to 18m deadweight tonnes in
2006.
Related impacts / consequences in the
UK economy
The transport of goods by sea is vital for the UK
economy. In 2000 the UK Government introduced
a Tonnage Tax regime, whereby taxable profits are
calculated on a net tonnage and daily rate, rather
than actual profits. This is viewed by the industry
as having generated a growth in the UK owned
fleet, and in revenues to the national economy.
Increased globalisation will mean further growth in
UK and worldwide shipping, similar to or greater
than the current steady 3 to 5% per annum.
The very recent (January 2008) report by Oxford
Economics, uses the ONS published statistics for
turnover and value added in 2004, which are as
used in this report. However, their independent
survey, based on data from members of the UK
Chamber of Shipping, suggests that turnover in
2004 was £10,115m. For 2006 the turnover and
value added were estimated at £9,814m and
£5,200m. We use the ONS statistics, in line with
the policy of using official government statistics
where possible, but draw attention to the
probability that these are slightly underestimated.
The Oxford Economics report is a useful analysis of
the non-direct impacts of a marine industry,
concluding that £11,000m is added to UK GDP by
shipping operations. It also draws attention to one
of the major difficulties, not just for shipping
operations, but in general in this kind of survey:
separating out the UK element from the total
economic activity. The contribution to Gross
National Income (as distinct from GDP) would, for
example, exclude the payments to foreign nationals
working for UK countries, but should include
payments to UK nationals working for non-UK
companies.
Socio-economic indicators of marine-related activity in the UK economy
21
Analyses of economic sectors - Shipping operations
Sources
● ONS
● Department for Transport. UK Seafarer
Statistics: 2006. Published May, 2007.
www.dft.gov.uk/pgr/statistics/datatable
spublications/maritime/seafarer/ukseaf
arerstatistics2006
● Review of Maritime Transport 2006.
Report of the UNCTAD Secretariat.
United Nations Conference on Trade and
Development. Geneva, 2006.
● The economic contribution of the UK
shipping industry. Prepared by Oxford
Economics for the UK Chamber of
Shipping, Winter 2007.
www.britishshipping.org/uploaded_files/OXFORD%
20STUDY%202007%20%20FINAL.doc
Figure 7: UK port traffic 1986-2006
700
outward
inward
total
tonnes (thousands)
600
500
400
300
200
100
0
1986
1988
1990
1992
1994
22
1998
2000
2002
2004
2006
Turnover
Gross
value
added
Exports
UK Number
employed
£8,820m
£3,399m
£7,891m
28,100
Shipping
operations
2005
1996
Marine Estate Research Report
Analyses of economic sectors - Ports
Turnover
In 2005 ABP had a UK revenue of £374m. Their
UK staff was 2,490, which is 4.6% of the total
54,000 employees associated with port services
according to a DfT survey. Scaling up the ABP
turnover gives a total UK turnover estimate for all
port authorities of £8,108m.
Value added
The ABP GVA is taken as staff costs plus profit,
which for 2005 was 62.2% of the turnover. Again
scaling for the UK ports in total from the sample
gives a GVA of £5045m.
Ports
(SIC(2007): 52.22)
Ports are distributed around the coast for historical
and geographical reasons, and linked to elaborate
societal infrastructures: roads, rail links, and
centres of population. There are three categories of
port ownership in the UK: company ports, ‘trust
ports’, and local-authority-owned or municipal
ports. Market forces rather than central planning
largely drive the industry. Port Authorities are
usually responsible for maintaining the basic
infrastructure: channels, navigation, and dockside
access. The market for the provision of dockside
services operates by separate contracts between a
wide range of separate businesses, the ship
owners and other port users. These services
include storage of freight, vessel salvage, cargo
handling, stevedoring, bunkering passenger
handling and services, and many other activities.
Note that marine operations are excluded, and
specifically covered in SIC 93.29.
Central statistics are kept only on the volumes of
traffic, but not on the economics of port
operations. An indirect estimate is necessary.
Associated British Ports owns and operates 21
ports, and 22.6% of all port business measured in
tonnes. Our approach is to take the available ABP
statistics from their 2005 Annual Report as a
sample of the industry, and scale up for all UK port
authorities. The additional diverse dockside
services are exceedingly difficult to estimate in
total, and have been underestimated in some
earlier analyses. Here the total dockside
employment estimated in a recent Department for
Transport report is used to scale up the figures
from the staff numbers directly employed by the
port authorities.
Numbers employed
Ports employ far fewer people today than they did
30 years ago. Currently it is estimated that some
54,000 employees are in direct port employment,
with a further 19,700 in port related jobs in the UK.
About 11,000 are employed directly by the port
authorities.
Information on intensity / value of activity
by region
Widely distributed; see the shipping operations
sector. Although the 65 municipal ports in England
and Wales contribute only 14% of the total traffic,
they can be significant drivers in regional and local
economies.
Trends and potential for future growth
The Government policy for port development
(2000) states “The industry faces rising
expectations, not only from users, but also from
local communities and the wider public. People are
looking for a more open and accountable
approach from those entrusted with legal duties
and powers to run our ports. They demand ever
higher safety and environmental standards. As
workplaces, ports have changed unrecognisably.
Tonnage rises year by year, but far fewer dockers
handle it, doing different jobs and using new
technology.” Southampton has experienced 25%
growth in container traffic over the past year.
Overall, there has been steady growth in UK port
activity over the past 5 years, mainly by more
efficient use of existing port structures; however,
new facilities with riverside berths (as opposed to
docking) are needed to accommodate further
expected expansion. In May 2007 Government
gave permission for the construction of a £1.5bn
London Gateway port to be developed in the
Thames Estuary at Thurrock.
Socio-economic indicators of marine-related activity in the UK economy
23
Analyses of economic sectors - Ports
Related impacts/ consequences for the
UK economy.
Transport of goods and passengers through
ports is fundamental to the UK economy.
Sources
● Associated British Ports Annual Report
2005. (and personal communication,
Peter Barham, ABP)
● Port Employment and Accident rates. A
report by the Department for Transport,
November 2005
● Evidence to the Ports Policy review of the
Transport Select Committee on
Transport. January 2007.
www.publications.parliament.uk/pa/
cm200607/cmselect/cmtran/61/611011
5.htm#n2
Turnover
Gross
value
added
£8,108m
£5,045m
Ports
2005
24
Exports
Number
employed
54,000
Marine Estate Research Report
Analyses of economic sectors - Navigation and safet
The Hydrographic Office
The UK Hydrographic Office prepares and
publishes Admiralty charts and tide tables. It also
provides consultancy services on marine boundary
delineation. It has operated as a Trading Fund
within the Ministry of Defence since 1996.
Turnover
£74.8m in 2005-6.
Value added
Staff costs were £35.9m.
Navigation
and safety
(SIC(2007) 52.22; part of 84.24)
This is a sector that aggregates Government and
non-government organisations concerned with
ship routing and safety at sea.
Lighthouse authorities
Lighthouses around the UK are paid for from the
General Lighthouse Fund. The Fund gets its money
from a levy on shipping using UK ports. In 2005-6
the levy was 35p net per ton. The three operating
Agencies are Trinity House; The Northern
Lighthouse Board; and the Commissioners for Irish
Lights.
Exports
The market for charts is global, but sales are
difficult to track as much business is through
agents. A conservative £20m is estimated.
Numbers employed
1015
Information on intensity / value of activity
by region
The offices are in Taunton.
Trends and potential for future growth
The Hydrographic Office has a mission to be the
world leader in the supply of hydrographic
information and services. It has a very strong
tradition and present global market position.
Source
● Hydrographic Office Annual Report and
Accounts 2005-6.
Turnover
£80.1m
Value added
Staff costs were £26.4m.
Numbers employed
765
Information on intensity / value of activity by
region
Headquarters are in London, Edinburgh and
Dublin. Operations are distributed around the
coast.
Trends and potential for future growth
The staffing levels are being reduced as
automation is established. Staff levels are expected
to reduce to 700 by 2008. All lighthouses were
automated by 1998.
Source
The General Lighthouse Fund Report 2005-6.
Socio-economic indicators of marine-related activity in the UK economy
25
Analyses of economic sectors - Navigation and safety
Maritime and Coastguard
Agency
The Agency is within the Department for Transport.
It has responsibilities for the Coastguard, and ship
inspections/registration. It also represents the UK
at the International Maritime Organisation.
Turnover
£128.8
Value added
£39.5 for staff costs.
Numbers employed
1,184
Information on intensity / value of activity
by region
Headquarters are in Southampton.
Trends and potential for future growth
There is increasing interest in counter-pollution
operations.
Source
● MCA Annual Report 2006.
Health and Safety Executive
The Offshore Safety Division of the Health and
Safety Executive is part of the Hazardous
Installations Directorate. In 2000 there were 230
people in the then separate OSD. HSE staff then
totalled 3,937, so the offshore part was 5.8%. This
percentage has been applied to the 2005-6
accounts.
Turnover
£262m total HSE expenditure. The attributed
marine part is £15.3m.
Value added
Staff costs were £161m, so the marine element is
£9.4m.
Source
● Health and Safety Commission Annual
Report 2005-6.
Royal National Lifeboat
Institution
The Institution is supported by voluntary
contributions. It operates around 230 lifeboat
stations around the UK. Many crew members are
also volunteers, but the mechanics are normally
employed by RNLI.
Turnover
£139m
Value added
£40.2m
Numbers employed
1,248
Information on intensity / value of activity
by region
The headquarters are in Poole, Dorset.
Trends and potential for future growth
Capital investment is expected to increase up to
2010.
Numbers employed
230
Information on intensity / value of activity
by region
There are offices in Norwich, Bootle, London, and
two in Aberdeen.
Source
● Annual Report of the RNLI for 2005.
Trends and potential for future growth
The mission is to support the industry to make the
UK Continental Shelf the safest offshore sector in
the world by 2010.
26
Marine Estate Research Report
Analyses of economic sectors - Navigation and safety
Figure 8: Employment in Navigation and safety sector
Lighthouses 765
Hydrographic Office 1,015
MCA 1,184
HSE 230
RNLI 1,248
Table 4: Summary for the safety and navigation sector
Navigation
and
safety
Turnover
£m
Gross
added
value £m
Exports
£m
Number
employed
2005-6
Lighthouse
Authorities
80.1
26.4
2005-6
The
Hydrographic
Office
74.8
35.9
2005-6
The
Maritime and
Coastguard
Agency
128.8
39.5
1,184
2005-6
The Health
and Safety
Executive
15.3
9.4
230
2005
Royal
National
Lifeboat
Institution
139.0
40.2
1,248
Total
450
150
Socio-economic indicators of marine-related activity in the UK economy
765
20
20
1,015
5,000
27
Analyses of economic sectors - Cables
Fish
Telecommunications is a major sector of the UK
economy with strong growth. In 1984 1.5% of
household expenditure was on telecoms but by
2002 this had increased to 2.5%. The total volume
of call minutes has increased seven-fold in that
time. The Internet makes heavy use of international
communication mechanisms, and these are now
almost entirely through fibre optic submarine
cables, rather than earth-orbiting satellites.
Upwards of 100 million simultaneous telephone
calls can be made down an individual cable; in
deep waters these cables are typically 17mm in
diameter, the fibres within which will have a
diameter of around 245µm. There are more than
10 operational cables across the Atlantic.
Cables
(SIC(2007): part of 35.12; part of 61.10)
Submarine cables are important both for the
transmission of power, and for
telecommunications. The rental received by The
Crown Estate is included in the licence and rental
section. Estimating the economic significance of
these has been very difficult, and has been
possible in a very approximate way only for
telecommunications. More detailed results remain a
challenge for the industry, and for future studies.
Submarine Telecommunications
Earlier economic assessments of marine activities
(see international section for references) have
looked at the capital investment, but not at the
whole impact of submarine cables as an economic
sector. There is a case for including a fraction of
the total business operational turnover as “marinerelated”, but the proportion is very difficult to
separate from the totals for telecommunications.
The business of telecommunication provides the
service of transmitting information. It is critically
dependent on submarine cables for international
traffic. Here we try to estimate the proportion of the
business of transmission that is depends on
cables. The value of the information itself (e.g.
images, software, reports) is not included, in the
same way that the value of cargoes carried on
ships by shipping companies is not included in the
shipping section. Not all analysts take this
approach, preferring to include only the costs of
installing and maintaining the cables.
2
28
Turnover
In 2005 the total telecoms revenue in the UK was
£46.6 billion. From fixed lines (household and
business) Ofcom report that 10.7% of the calls
revenue was from international calls. If we take this
percentage as a proxy for the submarine cable
related income and apply it to the total sector
turnover we get a turnover of £4,993 m.
Value added
The ONS combined use matrix for 2004 gives a
value added factor for the sector of 0.54. Applying
this to our turnover percentage gives an estimated
value added due to submarine cables of £2,705m.
Exports
For 2004 the ONS give exports of £3,007m for the
whole sector, which in turn gives £322m for cables.
Numbers employed
The whole sector employs about 250,000 people,
10.7% of which adjusts to 26,750 for jobs that may
be said to be marine-supported.
Information on intensity / value of activity
by region
This is an increasingly innovative industry. British
Telecom has its research centre near Ipswich.
Activities are widely distributed, and the business is
increasingly capital and equipment intensive.
Trends and potential for future growth
Costs are reducing dramatically as earlier
investments are paid off, and competition becomes
more general. The dominance of British Telecom is
being strategically reduced by Ofcom intervention,
though the BT share is still more than 50% for
most telecom activities. However, the mobile
phone part is much more open, and for this part,
income is now more than half as much again as
income from fixed lines. By the end of 2006 the
global telecomm industry had a turnover of $1.2
trillion; this is expected to grow at 5.9% per
annum, to $1.6 trillion in 2010.
Marine Estate Research Report
Analyses of economic sectors - Cables
Turnover
Gross
value
added
£4,993m
£2,705m
Telecommunications
2005
Related impacts / consequences in the
UK economy
In a knowledge based global society the use of
submarine cables will continue to increase.
Sources
● Ofcom Reports and Jeremy Gardner,
British Telecom
www.ofcom.org.uk/research/cm/cm06/c
mr06_print/telec.pdf
Exports
Number
employed
26,750
Power cables
It has proved impossible to quantify the economics
of submarine power cables within the time and
resources available. For the UK the main
international link is with France. There is also a
cable from Zeebrugge to Bacton.
The England-France Interconnector is a 2,000MW
high voltage direct current (HVDC) link between the
French and British transmission systems with
ownership shared between National Grid and
Réseau de Transport d'Electricité (RTE). The UK
landing point is at Baker's Gap, near Folkestone
from where the interconnector is cabled
underground to Sellindge converter station and
connected to the transmission system. The
interconnector is approximately 70km in length
with 45km of submarine cable.
As of 2005 imports of electricity from France have
historically accounted for about 5% of electricity
available in the UK. Imports through the
interconnector have generally been around the
highest possible level, given the capacity of the
link. In 2006, 97.5% of the energy transfers were
made from France to UK, supplying the equivalent
of 3 million English homes. The link availability is
around 98%, which is among the best rates in the
world. The continued size and duration of this flow
is open to some doubt, given the growth in
demand in Europe for clean electricity, and
increasing electricity demand within France.
Within the UK there are important links from
Scotland to Ireland, and to the Isle of Man, and to
the Scottish Islands.
Source:
www.nationalgrid.com/uk/Interconnectors/
France/
Socio-economic indicators of marine-related activity in the UK economy
29
Analyses of economic sectors - Business services
Table 5: Global market share
of UK maritime services
Ship finance
17%
Insurance underwriting
15%
Insurance P&I Clubs
67%
Lloyds Register
19%
Shipbroking
Tanker chartering
Dry bulk chartering
50%
30-40%
Secondhand tonnage
Business
services
(SIC(2007): part of 64; 65 and 69)
London is the leading centre worldwide in the
supply of a range of business services to the
international maritime shipping community. It is a
source of capital, and of expertise in marine
insurance, ship chartering, shipping finance, ship
classification, legal services, dispute resolution and
accountancy services.
Turnover
A rough estimate of marine-related turnover can be
obtained from the employment statistics (see Table
7) from the IFS 2004 Maritime Services Report,
and average City salaries, linked to turnover in the
2004 combined use matrix us. According to
MorganMcKinley the City recruitment agency,
average city salaries were £50,945 in October
2005, a premium of some 50% on average salaries
in the UK banking sector as a whole; total
compensation including superannuation may be
20% more than this (£61.1k). The ONS combined
use matrix shows that in 2004 employee
compensation for the banking and finance sector,
(which most closely reflects these activities) was
28.6% of turnover. This gives a turnover of £214k
per employee, which, for 14,062 employees (see
table 7), gives a total marine-related turnover of
£3,006m.
50%
Value added
Using the same arguments as above, based on
employee numbers, salaries, and factors from the
2004 combined use matrix, gives a value added
which is 69.4% of turnover, or £2.086bn.
Exports
£1,301m in 2004. See Table 6.
Numbers employed
For 2004 the number is estimated by the IFS, at
14,100. See Table 7.
Information on intensity / value of activity
by region
The City of London is the centre for the vast
majority of these activities.
Related impacts / consequences in the
UK economy
The so-called “invisibles” are an important element
in the UK balance of payments.
Sources
Maritime Services Report by International
Financial Services, London. October
2005
www.ifsl.org.uk/research/index.html
●
Within the totals, there is a separately identifies
£49m services to the leisure boating industry.
Business services related to cruising in Europe are
estimates to add €406 m, in earnings alone, which
is included within these totals.
30
Marine Estate Research Report
Analyses of economic sectors - Business services
Table 6: Net overseas earnings of UK maritime services
£m
1999
2002
2004
Baltic Exchange
297
322
551
Banking Services
100
150
170
Insurance brokers
160
170
170
Law firms
170
170
160
P&I Clubs
85
90
90
Barristers
20
20
20
Ship classification
51
54
75
Publishing
30
40
35
Others
30
30
30
Total
943
1,046
1,301
Table 7: UK employment in maritime services
2000
2003
2005
Shipbrokers
1700
1900
2041
Support staff
2300
2300
2457
Banking
400
400
400
Underwriters
500
200
200
Insurance brokers
1800
1600
1500
P&I Clubs
1100
1050
1030
Average adjusters
300
300
300
Law firms
2300
2200
2050
Barristers
200
200
200
Maritime arbitrators
100
100
100
Ship classification
1800
1850
1734
Publishing
800
800
750
Accountants
500
550
550
IMO & int.orgs.& institns.
400
450
450
Prof. Institutions
100
100
100
Others
200
200
200
14,500
14,200
14,062
Total
Turnover
Gross
value
added
£3,006m
£2,086m
Business
services
2004
Socio-economic indicators of marine-related activity in the UK economy
Exports
Number
employed
14,100
31
Analyses of economic sectors - Licence and rental
Oil and Gas
The UK’s legal framework for petroleum licensing is
founded on the premise that ownership of the
petroleum resources of Great Britain and the
territorial sea is vested in the Crown and the
Government has the right to grant licences to
explore for and exploit these resources as well as
those of the UK continental shelf. Companies
wishing to explore and exploit oil and gas
resources beneath the UK continental shelf must
obtain a licence from government (The UK
Department for Business, Enterprise & Regulatory
Reform (DBERR), formerly the Department for
Trade and Industry). These fees are small
compared with potential profits. Licence fees
include receipts from fees for onshore and offshore
petroleum exploration and production licenses,
including initial and periodic payments. In 2005-6
fees received were £57m of which perhaps £1m
was not offshore.
Licence and
rental
(SIC(2007): part of 68.2)
This category includes rental and licensing income
from operations offshore. It has two components:
The Crown Estate marine income; and central
Government income from licence fees for oil and
gas exploration and production. Petroleum revenue
tax and corporation tax paid by oil and gas
production companies totalled £9641m in 2005-6)
are not included.
Employment
About 50
● DBERR Oil and gas statistics:
In 2005-6 The Marine Estate part of
The Crown Estate had an income of £36.9 (14.6%
of group; operating costs £2.8m) and a property
value of £297m. The Marine Estate includes over
55% of the UK’s foreshore, the beds of tidal rivers
and estuaries, and almost the entire seabed out to
the 12 nautical mile territorial limit around the UK.
It also includes the rights to explore and utilise the
natural resources of the UK continental shelf, with
the exception of oil, coal and gas. Interests include
marine aggregates, potash mining, oil and gas
pipelines, telecommunication and power cables,
aquaculture, renewable energy, moorings, marinas,
wildfowling and ports.
www.ndad.nationalarchives.gov.uk/CRD
A/26/DD/1/3/web/fetched/_/www.dbddata.co.uk/bb2001/append8.htm
● The Crown Estate Annual report for 2006.
Turnover
Gross
value
added
£93m
£90m
Licence
and rental
32
Value added
Allowing expenses, £90m.
Sources
The Crown Estate
2005-6
Turnover
Estimated at £93m
Exports
Number
employed
50
Marine Estate Research Report
Analyses of economic sectors - Research and development
On 1 July 2001 MoD R&D activities were split into
two organisations: the Defence Science &
Technology Laboratory (Dstl) (about a quarter of
DERA) staying as a Trading Fund within MoD, the
remainder, becoming a private (extramural)
company, QinetiQ. In 2005-6 QinetiQ had a
turnover of £1,052m and a GVA of £571m;
employment was 11,024.
Many marine sectors, for example tourism, are
mature, or do not need extensive research to
underpin them. Others, such as equipment and
leisure craft construction, are actively developing
and need a high level of R&D to remain
competitive. The level of in-house R&D is estimated
to vary between 1% and 10% with an average
value near the lower end of the range.
Research and
development
(SIC(2007): part of 72)
Research and development (R&D) falls into three
categories: Industry Sector; University (Higher
Education Institutions); and Public Sector. Some
funding comes through European Union
programmes, but this is only a small part of the
total UK-funded component.
Industry Sector Research
Information for this sector is very difficult to obtain
as research expenditure is usually integrated within
company accounts. However, the Office of Science
and Innovation, publishes summaries and in some
cases detailed company research and
development returns. Only one of the OSI R&D
sectors, Ship Building and Repair, is specifically
marine. This sector spent £123m on in-house R&D
in 2004.The extractive industries, including solids,
liquids and gases, spent £35m on R&D in 2004,
consistent with a long-term decline.
In general, the marine-related market sectors
continue to look to the Public Sector for the
needed research, in contrast with pharmaceuticals
and aerospace, where 14.3% and 8.4% of sales in
2006 were spent on R&D by the companies
themselves.
Certain sectors operate, or are served by
specialised research companies, including HR
Wallingford and British Maritime Technology, which
were formerly in the public sector. BMT now
operates globally with a number of subsidiary
companies (£84.5m annual turnover in 2006;
1,077 employees). Associated British Ports
maintains a central research laboratory in
Southampton, which now trades as ABP Marine
Environmental Research Ltd.
Turnover
As a very rough estimate this is taken as: the OSI
values for ship building and the extractive
industries; a third of the BMT turnover; a fifth of the
QinetiQ turnover; and 3.1% (the sector average for
electronics and electrical) of the estimated marine
equipment sector total turnover of £7507m. This
gives a total of £629m.
Value added
Using the QinetiQ value added factor of 0.54 gives
£340m.
Exports
It is not possible to estimate these.
Numbers employed
Scaled from QinetiQ turnover and employment
levels, gives an estimate of 6,665.
Trends and potential for future growth
UK expertise as an exportable asset is expected to
continue to increase in value.
Sources
● DTI, Office of Science and Innovation.
The R&D scoreboard 2006.
www.innovation.gov.uk/rd_scoreboard
● QinetiQ Annual Reports and Accounts
2007.
www.qinetiq.com/home/investor_centre
/financial_information.html
● British Maritime Technology Company
Profile 2007
www.bmt.org
Socio-economic indicators of marine-related activity in the UK economy
33
Analyses of economic sectors - Research and development
Table 8: Employment in the HEI sector
Type of researcher
1999-2000
1994-1995
1988-1989
Academic staff
538
586
575
Technicians
328
341
385
Postdoctoral researchers
350
435
281
Postgraduate students
1022
1088
683
Total researchers
2,238
2,450
1,924
Higher Education Institutions
Earlier analyses (Pugh and Skinner, 2002) have
examined this sector in detail by meant of
questionnaires. For this report the same detailed
approach was not justified. Instead it is possible to
use the staffing levels from the 1999-2000 analysis,
and update these for 2005-6 salary levels. The
distribution of staffing levels has not changed
substantially over the period of three earlier
analyses (see Pugh and Skinner 2002 for full
details of earlier studies).
Turnover
This may be estimated at twice the value added
(see below). Note that some expensive central
research facilities including, for example, ship time
and complex analytical technologies, are covered
by NERC and included in the public sector section
below.
Value added
Based on the staff numbers in the table, including
postgraduate students, and costs of £50,000 per
annum for academics, £40,000 for technicians,
£25,000 for postdoctoral workers, and £12000 for
postgraduate students, the salaries add to £31m.
This allows 50% of academic time for research,
and 80% of technician time (the rest assumed to
be for teaching). Profits are assumed to be zero.
Numbers employed
Estimated at 2,238 from 1999-2000 survey.
Information on intensity / value of activity
by region
In 1999-2000 the three biggest HEI research
locations for marine activities were the School of
Ocean and Earth Science, Southampton; the
School of Ocean Sciences, Bangor; and the
Institute of Aquaculture, Stirling.
Sources
● HEFC salary figures.
● Pugh and Skinner, 2002.
34
Marine Estate Research Report
Analyses of economic sectors - Research and development
Table 9: Public sector summaries
Year
Turnover
£m
Gross
value
added £m
Number
employed
CEFAS
2005-6
40.4
16.9
508
FRS
2005-6
21.0
10.9
322
SAMS
2005-6
9.0
3.4
77
PML
2005-6
8.1
5.3
121
NOCS (NERC) (Research)
Average
2005-7
9.7
6.4
121
NOCS (NERC)
(National facilities)
Average
2005-7
11.0
7.3
178
POL
2005-6
7.0
4.6
130
Totals
106.2
54.8
1457
Public Sector Research
This is undertaken in support of Departmental
policy objectives, to improve operational efficiency,
or as a basic research function (Research
Councils). In considering Research Council
funding, and in order to avoid double-counting, it is
necessary to exclude grants made to HEIs, as
these are covered separately in that section. Here
the activity levels of the main, directly funded,
laboratories are summarised.
Turnover
Estimated at £106m
Value added
Estimated at £55m
Numbers employed
Estimated at 1,457
Information on intensity / value of activity
by region
The main laboratories of the tabulated
organisations are as follows:
● CEFAS. Centre for Environment, Fisheries &
Aquaculture Science. Lowestoft
● FRS. Fisheries Research Services. Aberdeen.
● SAMS. Scottish Association for Marine
Science. Oban
● PML. Plymouth Marine Laboratory. Plymouth.
● NOCS. National Oceanography Centre.
Southampton. The NOC includes the NERC
scientists working in Strategic Research
Divisions, and the National Marine Facilities
Division. The NMFD operates research vessels
including the new RRS James Cook (maiden
scientific voyage, March 2007; cost £40m).
● POL. Proudman Oceanographic Laboratory.
Liverpool.
Trends and potential for future growth
NERC has approved a £120m programme of coordinated research across seven marine centres
“Oceans 2025”, to run for 5 years from April 2007.
Sources
● Annual Reports of listed organisations.
Socio-economic indicators of marine-related activity in the UK economy
35
Analyses of economic sectors - Research and development
Figure 9: GVA for R&D by
activity. Total = £426m
Public sector £340m
HEIs £31m
Industry £55m
Table 10: Summary for research and development sector
Research
and
development
36
Turnover
£m
Gross
value
added £m
Number
employed
Industry
629
340
6,665
HEIs
62
31
2,238
Public Sector
106
55
1,457
Total
797
426
10,360
Marine Estate Research Report
Analyses of economic sectors - Marine environment
Decommissioning
Offshore oil and gas fixed installations are
eventually intended for decommissioning and
partial removal. The industry potential has been
estimated at between £15bn and £20bn, but only
a few projects are yet underway. One of these is
the BP North West Hutton rig which has an
approved decommissioning plan costing £160m
over the period 2004-2009.
Allowing for two such projects in progress (DBERR
Oil and Gas lists give details of approved schemes)
in 2005-6 gives a rough estimate of £80m turnover.
From construction industry averages, this gives
£31m added value and 1,200 employees.
Marine
environment
(SIC(2007): part of 74.90/1)
This sector includes activities which protect or
improve the marine environment. These include
wastewater treatment before discharge; the
decommissioning of offshore oil and gas
structures; and the activities of environmental
agencies and conservation bodies.
Conservation and environment
organisations
There are several quasi-government and other
organisations concerned with marine conservation,
many on a devolved regional basis. The information
has been obtained from annual reports of the
relevant organisations:
Joint Nature Conservation Committee
Natural England (formerly English Nature)
Countryside Council for Wales
Wastewater treatment
This is mainly done by the water companies,
whose activities are regulated by Water Services
Regulation Authority (Ofwat). In 2004 the limits for
financial charges for the period 2005-2010 were
determined after consultations. For 2005-6 total
operational turnover was projected at £7.5bn
investment, for all water activities, of which
sewerage services are about 52%. The fraction of
all discharges that are discharged to the coastal
environment is about 13% according to DEFRA
statistics. The rest is discharged to “freshwater and
estuarine” environments, but as it is not possible to
separate out the estuarine part of this, it is not
included here. There is also a £1.75bn capital
investment for sewerage alone, 13% of which is
£229m. This gives a total turnover of £736m.
Scottish Natural Heritage
Scottish Environment Protection Agency
Environment Agency
National Trust
The combined use matrix shows a value added
factor of 0.49 giving a value added of £363m for
wastewater treatment. Turnover per employee in
this sector scales to an estimated 6,624
employees.
Sources
● Future water and sewerage charges
2005-2010. Final determinations. OFWAT,
2004.
● Sewage treatment in the UK. UK
implementation of the EC Urban Waste
Water Treatment Directive.DEFRA 2002.
Socio-economic indicators of marine-related activity in the UK economy
37
Analyses of economic sectors - Marine environment
Table 11: Estimated statistics for the marine
conservation organisations
Approx %
marine
Turnover
£m
Value
added £m
Staff
total
marine
total
marine
total
marine
JNCC
2005-6
25
9
2
4
1
119
30
Natural England
2004-5
20
69
14
29
6
917
185
CCW
2005-6
20
40
8
18
4
660
130
SNH
2005-6
20
65
13
26
5
761
150
SEPA
2005-6
20
61
12
40
8
1,144
230
Environment
Agency (excluding
flood defence)
2005-6
20
497
99
284
57
9,200
1,800
2006
5
337
17
123
6
4,128
210
National Trust
TOTAL
165
All estimates are approximate. It has not been
possible to access relevant information for the
Northern Ireland body, Council for Nature
Conservation and the Countryside, which has a
statutory responsibility to advise the Environment
and Heritage Service.
These organisations do not include
heritage/historic interests; for example English
Heritage (total turnover £167m in 2005-6, and
1880 employees) has an interest in historic
seascapes and wrecks. However, separating a
marine part from their annual statements is not
feasible.
87
2,735
A consortium, lead by the National Trust, published
a report in November 2006 which estimated that
92,000 jobs in Wales depend on the Welsh
coastline and marine environment, and that these
activities have a turnover of £6.8bn, and a value
added of £2.5bn.
Sources
● Valuing our environment. Economic
impact of the coastal and marine
environment of Wales. November 2006.
www.nationaltrust.org.uk/walespolicy
● Annual reports of listed agencies
Table 12: Summary of environment sector
Gross
value
added £m
Exports
Number
employed
2005
Wastewater
treatment
736
364
12,100
2006
Decommissioning
80
31
1,200
2005/6
Conservation
agencies
165
87
2,735
Total
981
482
16,035
Environment
38
Turnover
£m
Marine Estate Research Report
Analyses of economic sectors - Defence
Numbers employed
In 2005-6 the average number of full-time
equivalent persons employed during the year was:
Service 203,290 and Civilians 95,750. Applying the
25% factor gives a total for the marine-related
element of around 74,760.
Sources
● MoD Annual Reports and Accounts
2005-6
www.mod.uk/NR/rdonlyres/804F2223614A-4CA2-9F17-B14607164C58/0/
modannual_report_0506_resourceaccts.
pdf
Defence
(SIC(2007): part of 84.22)
The Ministry of Defence marine expenditure is
calculated on the basis of Navy Resource
Outturns, and a proportional allocation of central
MoD management and services costs. In 2005-6
the total Net Resource Outturn of the MoD was
£32,738m. Of this the Commander-in-Chief Fleet
(£3,594m) and the Commander-in-Chief Naval
Home Command (£778m) are explicitly marine.
Central Services cost £15,252m).
Turnover
Adding the two explicitly marine figures above
(£4,372m) and the proportion of central services
(25%, based on the proportion of non-central
budgets allocated to marine; £3812m) gives a
marine-related turnover of £8,185 m
Value added
By convention the gross value added for public
sector activities is defined as the payment to
employees. For the MoD in 2005-6, the total
compensation to employees was £11,255m.
Applying the same (25%) proportion of the total
MoD salaries and wages costs for 2005-6 (25%;
£11,255 m) gives £2,814 m.
Turnover
Gross
value
added
£8,185m
£2,814m
Defence
2005-6
Socio-economic indicators of marine-related activity in the UK economy
Exports
Number
employed
74,760
39
Analyses of economic sectors - Leisure and recreation
about intentions to visit the seaside. It adds that
they do not expect “ a huge percentage of inbound
visitors to do this”. Of the 20 cities/towns most
visited by foreign visitors, only Brighton is a
traditional seaside resort. In 2005 Brighton had
332,000 visits by foreign tourists.
Numbers employed
The simple calculation of reducing the UK total
employment in the Tourism Industry (1.4 million
people) by the proportion of the total turnover that
is attributed to coastal towns gives an employment
of 90,000.
Leisure and
recreation
(SIC(2007): 50.10; 77.21; 77.34/1; part of 79
and 93)
Holiday tourism
This is a difficult sector to estimate as seaside
recreation is not usually distinguished from general
tourism in statistics, and the difference is hard to
define. Fortunately the Minister for Creative
Industries and Tourism has given Departmental
statistics in a response to a recent House of
Commons Committee Enquiry into the economics
of coastal towns.
Turnover
This is given in the Departmental evidence as an
abstraction from the estimated UK total for the
Tourism Industry of £75bn a year, and a total
employment of 1.4 million people. The estimated
expenditure for coastal towns is £4.8bn calculated
as:
17% of overnight stays and around £3.6bn
expenditure
7% of day trips and 5% of spend, giving £1.2bn
The average spend in 2002-3 for each day trip to
the seaside and coast was £18.50, significantly
lower than the amount spent by tourists visiting the
countryside (£20.70) and cities (£30.80)
Value added
The proportion of turnover which was gross value
added at basic prices for the hotel/catering/pub
sector in 2004 was 0.47 (combined use matrix).
This converts turnover to value added from seaside
recreation of £2.26bn.
Exports
The Departmental response states that total
international tourism visitor expenditure for 2005 in
the UK was £1.4bn, and adds that International
Passenger Surveys have not separately asked
40
Activity by region
Seaside tourism is distributed throughout the UK,
with many smaller resorts depending on a very
local clientele. Big centres such as Blackpool and
Brighton also attract conventions and conferences.
A study lead buy the National Trust has estimated
a total income for seaside tourism in Wales in 2003,
of over £700m (see also the environment sector).
Trends and potential for future growth
British coastal towns may be recovering from a
long-term decline in tourist numbers as many
people take short breaks, in addition to their more
expensive overseas holidays. They are increasingly
popular as retirement locations, but these trends
can also bring social problems, as discussed in
detail in the Parliamentary Committee Enquiry.
Source
● House of Commons, Communities and
Local Government Committee, Coastal
Towns. HC 351. Published 7 March 2007.
● Valuing our environment. Economic impact
of the coastal and marine environment of
Wales. November 2006.
Within the general category of holiday tourism, the
economics of recreational angling has been
studied in detail for England and Wales. The 2004
Drew report for DEFRA estimates and annual
aggregate expenditure of £538m, made up of
£178m shore based (54% of all participants), £82m
for charter boat (22%) and £278m for own boat
activities (23%). Most (97%) of anglers are men,
and they have been fishing for an average of 26
years. Participation has a strong local element, and
is greatest in the northeast of England, south of
England, and Wales. Overall the prospects appear
reasonably stable. These figures are assumed to
be already included in the overall holiday tourism
and leisure craft services categories.
Source
● statistics.defra.gov.uk/esg/reports/
seaangling/finalrep.pdf
Marine Estate Research Report
Analyses of economic sectors - Leisure and recreation
Cruising
Leisure cruising is a growing global industry, mainly
centred in the USA, but with a strong European
component. Passengers, ports of embarking, ports
of call, direct and indirect employment, and
ownership, are distributed internationally.
The global industry in 2006 had an estimated
turnover of £15.5bn, scaled upwards from
Carnival, the biggest operator having a turnover of
$11.8bn and 39% of all passengers.
Turnover
Because of the wide distribution of activities,
isolating the UK component of the industry is very
difficult. Only rough estimated can be made within
the resources available here. Douglas-Westwood
(2000) estimated the UK share at 11.9% of the
global market (£1.4bn in a market of £11.9bn). As
a very rough proxy for turnover, this gives a UK
turnover of £1.86bn from the £15.5bn global figure
for 2006 estimated above.
Value added
Using the value added factor of 0.47 for the hotel
and catering industry, gives a UK value added of
£878m. Business services from the UK to the
global cruising industry are estimates to add €406
m in earnings alone; these are covered in a
separate section.
Numbers employed
The European analysis prepared for the European
Cruise Council estimates 33,606 residents of
Europe were employed by the cruise lines, of
which 29,000 worked at sea aboard cruise ships.
Of these, 31.1% (10,470) were from the UK. The
same study estimated a direct economic input of
37,319 UK jobs, but this higher total includes a
wide range of bought-in services. For this wider
group, the total compensation was 1,457m Euros.
Trends and potential for future growth
Cruising has been growing as an industry at a rate
of 8.4% for more than two decades. In Europe Italy
is the main player with the UK second. The
customers are mainly elderly and cautious:
business trends are sensitive to terrorism incidents,
and even unrelated incidents such as Hurricane
Katrina’s impact on New Orleans in 2005. Of an
estimated 12m cruise passengers in 2006, about a
million came from the UK.
Sources
● Contribution of cruise tourism to the
economies of Europe. Report prepared
by G.P.Wild (International) Limited for the
European Cruise Council, February 2007.
www.mif-eu.org/ECC_Report_6 .pdf
● Carnival Annual accounts for 2006
● Cruise industry in figures. Business
briefing: Global Cruise 2004. By W. B.
Ebersold. US Department of
Transportation.
www.touchbriefings.co.uk/pdf/858/eber
sold.pdf
Activity by region
The main cruising areas are distant from the UK,
but cruise ships visit several UK ports.
Southampton claims to be the centre of the UK
cruise industry and is home to the QE2 and the
Queen Mary 2, and to the Princess liners. All are
now part of the Carnival group, run from the USA,
but shares are traded on exchanges in both New
York and London. In 2005 Southampton had
701,000 passenger transfers, with ingoing and
outgoing counting separately. Some 503,000
passengers embarked on cruises from the UK;
1,071,000 UK people embarked on cruises from all
European ports.
Socio-economic indicators of marine-related activity in the UK economy
41
Analyses of economic sectors - Leisure and recreation
Leisure craft services
The leisure craft and small boat industries have
been well served by recent economic analyses
under the auspices of the British Marine
Federation. Their industry analyses include boat
building and business services, both of which are
covered in other sections of this report. Total
turnover (2005/6) is estimated at £2.8bn for the
combined leisure and small commercial marine
industry. In this section we concentrate only on the
services provided to the leisure industry, including
distribution costs. These services have been in the
recent BMF (August, 2007) report on marinas, from
which the following figures have been taken.
Turnover
For boating services, the gross sales for 2005/6
including moorings, marinas, and boatyard
services, retail, charters and school, was £755m.
Value added
This is estimated at £188m in 2005/6.
Exports
Most services are delivered locally, and the BMF
2007 report (section 3.4) considers exports to be a
very minor aspect of core activities
Activity by region
Concentration of activities is greatest in the south,
with 34.3% of marina berths in the South East;
17.7% in the South West; 11% in the East of
England. For Scotland the figure is 9.2%, and for
Wales, 7.3%.
Trends and potential for future growth
Obviously climate has an effect on the regional
distribution with the southern regions favoured, but
the industry considers there is scope for
development in the more northerly areas. Steady
growth is expected as leisure activities increase
overall. This sector, which involves luxury optional
purchases, is sensitive to overall global economic
conditions, especially for the sales of new boats.
Sources
● British Marine Federation (2006). UK
Leisure and Small Commercial Marine
Industry. Key Performance Indicators
2005/6.
● British Marine Federation (2005).
Economic benefits of the UK leisure
boating Industry.
● British Marine Federation (2007).
Economic benefits of coastal marinas in
the UK and Channel Islands.
Numbers employed
Around 14,187 fulltime equivalent jobs in 2005/6,
in the services and supply sections listed above.
Table 13: Summary for leisure and recreation sector
Leisure and
recreation
42
Turnover
£m
Gross
value
added £m
Exports
£m
Number
employed
2005
Holiday
tourism
4,800
2,260
90,000
2006
Cruising
1,860
878
10,470
2005/6
Leisure craft
services
775
188
14,200
Total
7,435
3,326
114,670
Marine Estate Research Report
Analyses of economic sectors - Education and training
Education and
training
(SIC(2007): part of 85.4)
In the Higher Education sector there are many
courses that are specifically marine. Many of these
are attended by overseas students and fees paid
are an input to the UK economy. Costs are very
difficult to isolate from R&D as HEIs perform both
activities.
Turnover
Using the figure of 538 academic staff (see table 8)
and assuming a staff-student ratio of 12:1
(including MSc course and similar) gives a student
population of 6,460. Taking the fees for overseas
students at the Southampton Oceanography
Centre (now the NOC, Southampton) of £11,300
per annum as FEC, gives a turnover of £73m.
Value added
Applying the value added factor for the whole
education sector of 0.72 gives £52m.
Numbers employed
Assuming 50% of academic staff time and 20% of
technician time is teaching gives a very
approximate value of 350. However this does not
include all the related HEI staff support for
students.
Exports
More than 10% of students in UK HEIs are from
overseas.
Turnover
Gross
value
added
£73m
£52m
Education
and training
2006
Socio-economic indicators of marine-related activity in the UK economy
Exports
Number
employed
350
43
Summary of activities
Summary of
activities
Table 14a summarises the turnover, value added
and employment levels estimated for each sector.
The contributions of each sector are summarised
against the UK totals, for value added and
employment, where the total UK values are scaled
to 1,000. Note that the UK Gross Domestic
Product used for scaling the value added from
each sector is the GDP at basic prices. The total
UK figures are for 2005, taken from Tables 1.1 and
2.5 of the 2007 ONS Blue Book. These give total
UK Gross Value Added (at current basic prices) of
£1,097bn, and total employment levels of
30.7m.The order for the sectors is the same as in
the text, and approximately that of SIC 2007.
Table 14a: Summary of all economic sectors in SIC order
“year”
Turnover
£m
Gross value
added £m
GDP=1000
Employment
UK=1000
Fish
2004
3,740
808
0.7
31,633
1.0
Oil and gas
2005
28,693
19,845
18.1
290,000
9.4
Aggregates
2006
242
114
0.1
1,670
0.1
Ship and boat building
2004
2,720
1,193
1.1
35,000
1.1
Equipment
2004
7,880
3,268
3.0
181,688
5.9
Renewable energy
2005-6
32
10
0.0
50
0.00
Construction
2005-6
558
228
0.2
6,200
0.2
Shipping operations
2004
8,820
3,399
3.1
28,100
0.9
Ports
2005
8,108
5,045
4.6
54,000
1.8
Navigation and safety
2005
450
150
0.1
5,000
0.2
2005-6
4,993
2,705
2.5
26,750
0.9
Business services
2004
3,006
2,086
1.9
14,100
0.5
Licence and rental
2005-6
93
90
0.1
50
0.0
R and D
2005-6
797
426
0.4
10,360
0.3
Environment
2005-6
981
482
0.4
16,035
0.5
Defence
2005-6
8,185
2,841
2.6
74,760
2.4
Leisure and recreation
2005-6
7,435
3,326
3.0
114,670
3.7
2006
73
52
0.1
350
0.01
86,806
46,041
42.0
890,416
29.0
Cables
Education
Totals
Socio-economic indicators of marine-related activity in the UK economy
45
Summary of activities
Figure 10: GVA by economic activity
20,000
£ million
15,000
10,000
5,000
F
vir ish
on
m
en
t
R
an
Co
Na
d
D
ns
vig
tru
at
io
c
t
n
an ion
d
sa
fe
ty
Ag
Li
ce
gr
ga
nc
te
e
an
s
d
re
nt
al
Ed
Re
uc
ne
a
w
tio
ab
n
le
en
er
gy
d
En
io
ns
re
cr
ea
Eq tion
ui
pm
en
De t
fe
nc
e
Bu
C
ab
Sh sine
l
ss
e
ip
an
se s
d
rv
ice
bo
at
s
bu
ild
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g
at
an
re
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Le
Sh
ip
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ng
O
op
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0
Table 14b: Summary of all economic sectors, in order of value added
“year”
Turnover
£m
Gross value
added £m
GDP=1000
Employment
UK=1000
Oil and gas
2005
28,693
19,845
18.1
290,000
9.4
Ports
2005
8,108
5,045
4.6
54,000
1.8
Shipping operations
2004
8,820
3,399
3.1
28,100
0.9
2005-6
7,435
3,326
3.0
114,670
3.7
2004
7,880
3,268
3.0
181,688
5.9
Defence
2005-6
8,185
2,841
2.6
74,760
2.4
Cables
2005-6
4,993
2,705
2.5
26,750
0.9
Business services
2004
3,006
2,086
1.9
14,100
0.5
Ship and boat building
2004
2,720
1,193
1.1
35,000
1.1
Fish
2004
3,740
808
0.7
31,633
1.0
Environment
2005-6
981
482
0.4
16,035
0.5
R and D
2005-6
797
426
0.4
10,360
0.3
Construction
2005-6
558
228
0.2
6,200
0.2
Navigation and safety
2005
450
150
0.1
5,000
0.2
Aggregates
2006
242
114
0.1
1,670
0.1
2005-6
93
90
0.1
50
0.0
2006
73
52
0.05
350
0.01
2005-6
32
10
0.01
50
0.00
86,806
46,041
42.0
890,416
29.0
Leisure and recreation
Equipment
Licence and rental
Education
Renewable energy
Totals
46
Marine Estate Research Report
Summary of activities
Figure 10 and Table 14b, show the value added by
different sectors in order of magnitude and as a bar
chart, also arranged in order of value added. Gas
and oil extraction is the dominant marine economic
sector. The second sector is ports, followed by
shipping operations, leisure and recreation, and
equipment. The smallest sectors are renewable
energy and education.
Marine related jobs account for 29 in every
thousand in the UK. The lower factor for
employment compared with the 4.2% for value
added means that jobs in the marine sector are
more effective at generating wealth than average
employment in the UK economy. The most
effective marine sectors for generating wealth for
each person working in the sector are business
services, education and shipping operations. Some
caution is necessary when considering the
education output per employee as the substantial
student administration and wider non-academic
support jobs are not included. The least effective
jobs for creating value added are in the leisure and
recreation, fish, and equipment sectors. Many of
the numbers used are indirect estimates, and so
these are only approximate overall indications.
Figure 11 shows the relative value added
contribution for five aggregated marine sectors.
Figure 11: Marine value added by aggregated sectors
Extraction: oil and gas; renewable energy;
fishing; licensing and rent; aggregates.
Transport: shipping; navy; business services;
communications; navigation and safety.
Manufacture: ship and boat building;
equipment; construction.
Appreciation: recreation and leisure;
environment;
Understanding: research and development;
education.
Extraction 46%
Transport 35%
Manufacture 10%
Appreciation 8%
Understanding 1%
Extraction, dominated by oil and gas, is the
major (46%) aggregated sector. All the various
aspects of transport added together constitute
35% of the total value added. Understanding is
lowest with 1%. Manufacturing and
appreciation contribute 10% and 85
respectively.
Socio-economic indicators of marine-related activity in the UK economy
47
Summary of activities
Consideration of the combined use matrix
modelling approach and calculating gross value
added does not fully capture the ongoing impacts
of activities in the economy.
Some separate indicators include:
● 40% of all energy consumed in the UK in 2005
was from natural gas;
● 33% of energy consumed was in the form of
petroleum;
● most Internet traffic depends on submarine
cables;
● the landed value of fish is increased by 500%
before serving in a restaurant;
● a study for ABP estimates that the turnover for
their five South Wales ports of
● £45m (2003) indirectly supports £1.7bn of
gross input to the Welsh economy;
● 95% of all UK international trade passes
through UK ports;
● cruising holidays are one of the fastest growing
sectors in the global economy;
● holidays taken at local UK coastal resorts,
involving less travel, may have a lower carbon
footprint.
The total direct and indirect contribution to the UK
economy of the marine sectors can be roughly
estimated from the turnover, as the difference
between value added and turnover is substantially
goods and services bought in from other sectors of
the economy. These other sectors will include
supply of electricity, ware and banking services.
However, not all of the difference between turnover
and value added can be ascribed to an indirect
economic contribution, as some of our marine
sectors have purchased services from other marine
sectors; to include these would mean double
counting. We have specifically noted and used the
purchases from one marine sector to another in
48
estimating the total value added in equipment
manufacture by examining the combined use
matrix for equipment bought into the shipbuilding
sector. Nevertheless a cautious indication might be
that 50 to 70% of the goods and services
purchased by marine sectors were from nonmarine sectors. This gives a total direct and indirect
contribution of marine activities to the UK economy
of between 6.0% and 6.8%.
The overall turnover and value added figures are
not directly comparable with those reported earlier
(Pugh and Skinner, 2002, summarise these), but
the general conclusion is that marine activities
continue to be substantial contributors to the UK
economy and to generating employment.
Marine Estate Research Report
Services that are not economically charged
Services that are
not economically
charged
Although outside the context of this report, it may
be noted that not all marine-related activities
appear in strict national accounting systems. It is
worth drawing attention to some of these, and it is
usual when doing so to identify two categories:
those benefits which directly relate to human
activities, and those uses that are of a more
indirect and generic nature.
The direct human benefits that do not appear in
financial assessments include the use of the sea for
recreational fishing; sailing; and the use in many
places of the beaches without charge. The value of
these services is difficult to estimate, but attempts
have been made. For example, as long ago as
1988-9, surveys suggested that people valued a
beach visit at £7.65 per day (The Economics of
Coastal management: a manual of assessment
techniques. Published by Belhaven/Wiley, 1992). A
recent survey of house price increases shows that
seaside towns are particularly active (Halifax, prices
at March 2007; and Financial Times, 16 June
2007) supposedly attracting buyers looking for
lifestyle changes, along with second-home buyers
and buy-to-let investors. This enhancement of
prices for living near the sea is sometimes called
hedonistic pricing, in economic terms.
The generic wider scale and more indirect uses
which have value, “environmental services”, are
sometimes linked to the concept of “environmental
capital”. The services are also linked to ecosystem
services on a global basis and the oceans may be
a substantial contribution.
Services include:
● gas regulation - maintaining a balanced
chemical composition in the atmosphere,
● climate regulation - control of global
temperature, precipitation, greenhouse gas
regulation, cloud formation,
● disturbance regulation - storm protection, flood
● nutrient cycling - the storage, internal cycling,
processing and acquisition of nutrients,
nitrogen fixation, phosphorus cycles,
● waste treatment - the breakdown of excess
toxic compounds,
● biological control - the trophic-dynamic
regulation of populations,
● refugia - feeding and nursery habitats for
resident and transient populations of harvested
species,
● food production - the portion of gross primary
production which is extracted as food for
humans,
● raw materials - the portion of gross primary
production which is extracted as fuel or
building material,
● genetic resources - sources of unique
biological materials for medicines,
● recreation - opportunities for tourism, sport and
other outdoor pastimes
The theoretical cost to humanity of artificially
replacing the ecosystem services, were they not
provided by nature, has been estimated at
$8,400bn per year for the open oceans and 1.5
times this for coastal ecosystems. However placing
numbers on these viable yet imprecise services is
extremely tentative, and must depend on the
economic model applied: for example, are they
estimated at absolute or marginal cost?
There are other cultural benefits that are even more
difficult to quantify. These include opportunities for
aesthetic, artistic, educational, spiritual activities.
Benefits could also include the value people place
on knowing that the coastal regions, or the oceans
in general, are well kept and that they will be
passed on to future generations in a good state.
In summary, not all the benefits of the oceans are
encapsulated in strict statistics of national GDP
and turnover.
Source
● UN Atlas of the Oceans.
www.oceansatlas.org
control, drought recovery,
● water regulation - regulation of global, regional
and local scale hydrology through currents and
tides,
● water supply - storage of water returned to
land as precipitation,
● erosion and sediment transport/deposition -
moving sediments from source areas and
replenishing depositional areas,
Socio-economic indicators of marine-related activity in the UK economy
49
Towards a marine activities indicator
Towards a
marine activities
indicator
Various analyses have considered the possibility of
a semi-automatically generated annual indicator of
marine activities in the UK economy. The intention
would be to use these in the periodic assessment
of the state of the UK seas and specifically, their
economic productivity.
There are some serious difficulties in seeking to
identify a suitable approach, principally due to the
fact that only a few marine activities are separately
and uniquely identified in national statistics. Table
15 summarises the situation for each sector in this
report. The right-hand column is partly a subjective
assessment of the difficulties experienced in
accessing data for this report. Five stars means
readily accessible official statistics. One star means
that only rough indirect estimates are possible.
Table 15: Data sources ordered by accessibility
Gross
value
added £m
Sector
GDP=
1000
19,845
Oil and Gas
18.1
ONS
★★★★★
2,814
Defence
2.6
ONS
★★★★
1,193
Ship and
boat building
1.1
ONS; regular industry analyses
★★★★
808
Fish
0.7
ONS
★★★★
150
Navigation and
safety
0.1
Annual reports and Authorities
★★★★
114
Aggregates
0.1
ONS and industry
★★★★
90
Licence and rental
0.1
Crown Estate and DBERR
★★★★
3,399
Shipping operations
3.1
ONS
★★★
2,086
Business services
1.9
Industry survey repeated
intermittently
★★★
5,045
Ports
4.6
Industry and employment
ad hoc report
★★
3,326
Leisure and
recreation
3.0
Regular industry analyses;
DEFRA estimate
★★
482
Environment
0.4
Ofwat, indirectly
★★
426
R and D
0.4
Industry, laboratory and
university reports
★★
10
Renewable energy
0.01
Industry
★★
3,268
Equipment
3.0
Industry and indirect calculations
★★
2,705
Cables
2.5
Indirectly from Ofcom and
industry
★
228
Construction
0.2
Indirect calculations
★
52
Education
0.05
Indirect from academic surveys
★
50
Data source
Regular
availability
Marine Estate Research Report
Towards a marine activities indicator
Only oil and gas extraction falls into the 5*
category. Equipment and telecommunications are
big sectors that are poorly accessible. Even port
activities are difficult because of the decentralised
nature and private ownership of major parts of the
industry.
Figure 12 shows that only 54% of the total value of
marine activities is in the 5* and 4* categories,
those which might be available for semi-automatic
indicator generation. Of this 54%, 43% is the single
oil and gas sector, for which it should also be
noted that for this sector the value added is
critically dependent on international oil and gas
price fluctuations rather than actual volume
productivity. The most difficult sectors, 1* and 2*,
constitute 34% of the total for marine-related
activities in the economy.
The main conclusion must be that there is at
present no simple way to generate a
comprehensive indicator of the level of marinerelated activities in the UK economy.
However, further investigations could be
productive. It may be possible to target some more
specific marine activities at lower levels within the
data collected by the ONS in the SIC 2007
framework. In this report the sector headings give
relevant codings. and Annex 1 gives extracts
detailed marine-related extracts from that
classification which will come into force from
January 2008. Nevertheless as Annex 1 shows,
there are many sectors especially equipment,
where the information will not be available directly
in a suitable form for marine specific studies.
Figure 12: Relative accessibility
of marine-related economic
statistics
43%
5*
11%
4*
12%
3*
20%
2*
14%
1*
Socio-economic indicators of marine-related activity in the UK economy
51
Other national studies
Other national
studies
Some countries with strong marine interests, in
addition to the UK, have recognised the limitations
of official statistics-gathering procedures in
capturing the importance of marine activities in
their national economies. It may be helpful to refer
briefly to some of these here.
Australia
A survey over the period 1995-2003, published in
2004 showed that 3.6% of Australia’s GDP was
marine-related, and that tourism (42%) and oil and
gas from offshore (42%) were the biggest sectors.
Source
● The Economic Contribution of Australia's
Marine Industries
Allen Consulting Group 2004
eied.deh.gov.au/coasts/mbp/publications
/marine-economic.html
Canada
A detailed Economic study of Canada’s marine and
ocean industries was published in 2001. It
estimated marine activities contributed 1.4% to
Canadian GDP.
Source
● www.nrc-cnrc.gc.ca/clusters/ocean/
economicstudy2001/sum_e.html
Recent work by a consultancy company has
sought to develop a more modern and rigorous
'Methodology' from which to begin to build a new
direction of producing a 'Biennial Report Card' on
the economic value of marine related activities at a
national level. The next step is to obtain the funding
(about Can$350k) and then begin the survey which
was expected to begin in October 2007.
There are also recent studies of marine activities in
Provincial economies:
Source
● Nova Scotia (10% of the Province’s GDP)
and other Maritime Provinces;
www.mar.dfo-mpo.gc.ca/e/marine.htm
● British Columbia (7% of the GDP);
Economic contribution of the oceans
section in British Columbia, April 2007.
Report prepared for Canada/British
Columbia Oceans Coordination
Committee.
52
Marine Estate Research Report
Other national studies
France
IFREMER publish a marine economics assessment
every two years. The 2005 version includes a
detailed analysis of marine leisure cruising, and
includes separate categories for the private and
public sectors of the economy. It gives data for the
year 2003 when the marine sector was 1.2% of the
total GDP. Coastal tourism was by far the biggest
sector, followed by seafood, shipping and ports,
then shipbuilding. The economics section of
IFREMER is currently preparing the 2007 edition.
Source
● French marine-related economic data
2005.
www.ifremer.fr/drvsem/fr/donnees/index
.htm
USA
The USA National Ocean Economics Program has
a series of studies and publications. They have
done customized marine-related economic studies
for Florida and California, but have not put together
a report per se on the USA. Individual economic
sectors and state economies can be selected from
an interactive menu. They intend to publish a
report card for the USA at the end of 2007, and will
probably do so annually thereafter. The products
are time series for identifying trends, for making
forecasts, or for comparisons of sectors,
geographies or time periods.
Source
● noep.mbari.org/About
Socio-economic indicators of marine-related activity in the UK economy
53
General References
General
References
From the Office for
National Statistics
Annual Abstract of Statistics 2006
The United Kingdom National Accounts 2007. The
Blue Book. Published annually.
United Kingdom Input-Output Analyses 2006- with
combined use matrix for 2004-5.
United Kingdom Balance of Payments 2006. The
Pink Book. Published annually.
UK Trade in Goods analysed in terms of Industries
updated quarterly
Economic and Labour Market Review. January
2007.
UK Standard Industrial Classification of Economic
Activities 2007 (SIC 2007)
Structure and explanatory notes
See www.statistics.gov.uk where most of these
are available free for download. Many, but not all, of
these can be purchased in hard copy. ONS uses
Palgrave Macmillan as its publisher.
Other UK Reports
Douglas-Westwood Associates (2000) UK marine
Industries World Export Market Potential- a report
for the Marine Foresight Panel.
Pugh D and Skinner L (2002) A new analysis of
marine-related activities in the UK economy with
supporting science and technology. IACMST
Information Document No. 10. 48 pp. The target
year was 1999-2000. This is out of print, but
available at:
www.marine.gov.uk/publications/NEWMARSURV
ACRO.PDF
Socio-economic indicators of marine-related activity in the UK economy
55
Annex 1 Marine activities in SIC 2007
Annex 1
Marine activities
in SIC 2007
This Annex identifies marine economic activity
classifications in the new UK Standard Industrial
Classification of Economic Activities (SIC 2007)
which comes into effect on 1 January 2008. It is
included here as a first step towards a future, more
detailed identification of marine-related activities, at
a deeper level within ONS analyses.
The SICs are periodically updated; the new version
is the outcome of Operation 2007 - a series of
consultations started in 2002 and carried out in
conjunction with the major revision of the European
Union’s industrial classification system, NACE.
The UK is required by European legislation to revise
its SIC in parallel with NACE so that both systems
remain identical down to and including the 4 digit
class level. A further breakdown is provided for
certain classes by the addition of a 5 digit subclass
level. Both the UK SIC and NACE are completely
consistent with the UN’s International Standard
Industrial Classification of all Economic Activities
(ISIC) which has itself just been revised.
These revisions are motivated by the need to adapt
the classifications to changes in the world
economy. The revised classifications reflect the
growing importance of service activities in the
economies over the last fifteen years, mainly due to
the developments in information and
communication technologies (ICT).
The following classes are
substantially marine:
03.11 Marine fishing
This class includes:
- fishing on a commercial basis in ocean and
coastal waters
- taking of marine crustaceans and molluscs
- whale catching
- taking of marine aquatic animals: turtles, sea
squirts, tunicates, sea urchins etc.
This class also includes:
- activities of vessels engaged both in marine
fishing, and in processing and preserving of fish
- gathering of other marine organisms and
materials: natural pearls, sponges, coral and algae
This class excludes:
- capturing of marine mammals, except whales,
e.g. walruses, seals, see 01.70
- processing of whales on factory ships, see 10.11
- processing of fish, crustaceans and molluscs on
factory ships or in factories ashore, see 10.20
- renting of pleasure boats with crew for sea and
coastal water transport (e.g. for fishing cruises),
see 50.10
- fishing inspection, protection and patrol services,
see 84.24
- fishing practiced for sport or recreation and
related services, see 93.19
- operation of sport fishing preserves, see 93.19
03.21 Marine aquaculture
This class includes:
- fish farming in sea water including farming of
marine ornamental fish
- production of bivalve spat (oyster mussel etc.),
lobsterlings, shrimp post-larvae, fish fry and
fingerlings
- growing of laver and other edible seaweeds
- culture of crustaceans, bivalves, other molluscs
and other aquatic animals in sea water
This class also includes:
- aquaculture activities in brackish waters
- aquaculture activities in salt water filled tanks or
reservoirs
- operation of fish hatcheries (marine)
- operation of marine worm farms
This class excludes:
- frog farming, see 03.22
- operation of sport fishing preserves, see 93.19
06.10 Extraction of crude petroleum
This class includes:
- extraction of crude petroleum oils
This class also includes:
- extraction of bituminous or oil shale and tar sand
- production of crude petroleum from bituminous
shale and sand
- processes to obtain crude oils: decantation,
desalting, dehydration, stabilisation etc.
56
Marine Estate Research Report
Annex 1 Marine activities in SIC 2007
This class excludes:
- support activities for oil and natural gas
extraction, see 09.10
- oil and gas exploration, see 09.10
- manufacture of refined petroleum products, see
19.20
- recovery of liquefied petroleum gases in the
refining of petroleum, see 19.20
- operation of pipelines, see 49.5
06.20 Extraction of natural gas
This class includes:
- production of crude gaseous hydrocarbon
(natural gas)
- extraction of condensates
- draining and separation of liquid hydrocarbon
fractions
- gas desulphurisation
This class also includes:
- mining of hydrocarbon liquids, obtained through
liquefaction or pyrolysis
This class excludes:
- support activities for oil and natural gas
extraction, see 09.10
- oil and gas exploration, see 09.10
- recovery of liquefied petroleum gases in the
refining of petroleum, see 19.20
- manufacture of industrial gases, see 20.11
- operation of pipelines, see 49.50
09.10 Support activities for petroleum and
natural gas extraction
This class includes:
- oil and gas extraction service activities provided
on a fee or contract basis:
● exploration services in connection with
petroleum or gas extraction, e.g. traditional
prospecting methods, such as making
geological observations at prospective sites
● directional drilling and redrilling; "spudding in";
derrick erection in situ, repairing and dismantling;
cementing oil and gas well casings; pumping of
wells; plugging and abandoning wells etc.
● liquefaction and regasification of natural gas for
purpose of transport, done at the mine site
● draining and pumping services, on a fee or
contract basis
● test drilling in connection with petroleum or gas
extraction
This class also includes:
- oil and gas field fire fighting services
This class excludes:
- service activities performed by operators of oil or
gas fields, see 06.10, 06.20
- specialised repair of mining machinery, see 33.12
- liquefaction and regasification of natural gas for
purpose of transport, done off the mine site, see
52.21
- geophysical, geologic and seismic surveying, see
71.12
10.20 Processing and preserving of fish,
crustaceans and molluscs
This class includes:
- preparation and preservation of fish, crustaceans
and molluscs: freezing, deep-freezing, drying,
cooking, smoking, salting, immersing in brine,
canning etc.
- production of fish, crustacean and mollusc
products: fish fillets, roes, caviar, caviar
substitutes etc.
- production of fishmeal for human consumption or
animal feed
- production of meals and solubles from fish and
other aquatic animals unfit for human
consumption
This class also includes:
- activities of vessels engaged only in the
processing and preserving of fish
- processing of seaweed
This class excludes:
- processing and preserving of fish on vessels
engaged in fishing, see 03.11
- processing of whales on land or specialised
vessels, see 10.11
- production of oils and fats from marine material,
see 10.41
- manufacture of prepared frozen fish dishes, see
10.85
- manufacture of fish soups, see 10.89
30.11 Building of ships and floating structures
This class includes the building of ships, except
vessels for sports or recreation, and the
construction of floating structures:
This class includes:
- of commercial vessels: passenger vessels, ferryboats, cargo ships, tankers, tugs etc.
- building of warships
- building of fishing boats and fish-processing
factory vessels
This class also includes:
- building of hovercraft (except recreation-type
hovercraft)
- construction of drilling platforms, floating or
submersible
- construction of floating structures:
● floating docks, pontoons, coffer-dams, floating
landing stages, buoys, floating tanks, barges,
lighters, floating cranes, non-recreational
inflatable rafts etc.
- manufacture of sections for ships and floating
structures
Socio-economic indicators of marine-related activity in the UK economy
57
Annex 1 Marine activities in SIC 2007
This class excludes:
- manufacture of parts of vessels, other than major
hull assemblies:
● manufacture of sails, see 13.92
● manufacture of ships' propellers, see 25.99
● manufacture of iron or steel anchors, see 25.99
● manufacture of marine engines, see 28.11
- manufacture of navigational instruments, see
26.51
- manufacture of lighting equipment for ships, see
27.40
- manufacture of amphibious motor vehicles, see
29.10
- manufacture of inflatable boats or rafts for
recreation, see 30.12
- specialised repair and maintenance of ships and
floating structures, see 33.15
- ship-breaking, see 38.31
- interior installation of boats, see 43.3
30.12 Building of pleasure and sporting boats
This class includes:
- manufacture of inflatable boats and rafts
- building of sailboats with or without auxiliary
motor
- building of motor boats
- building of recreation-type hovercraft
- manufacture of personal watercraft
- manufacture of other pleasure and sporting
boats:
● canoes, kayaks, rowing boats, skiffs
This class excludes:
- manufacture of parts of pleasure and sporting
boats:
● manufacture of sails, see 13.92
● manufacture of iron or steel anchors, see 25.99
● manufacture of marine engines, see 28.11
- manufacture of sailboards and surfboards, see
32.30
- maintenance and repair of pleasure boats, see
33.15
33.15 Repair and maintenance of ships and
boats
This class includes the repair and maintenance of
ships and boats. However, the factory rebuilding or
overhaul of ships is classified in division 30.
This class includes:
- repair and routine maintenance of ships
- repair and maintenance of pleasure boats
This class excludes:
- factory conversion of ships, see 30.1
- repair of ship and boat engines, see 33.12
- ship scrapping, dismantling, see 38.31
58
50.10 Sea and coastal passenger water
transport
This class includes:
- transport of passengers over seas and coastal
waters, whether scheduled or not:
● operation of excursion, cruise or sightseeing
boats
● operation of ferries, water taxis etc.
This class also includes:
- renting of pleasure boats with crew for sea and
coastal water transport (e.g. for fishing cruises)
This class excludes:
- restaurant and bar activities on board ships,
when provided by separate units, see 56.10,
56.30
- renting of pleasure boats and yachts without
crew, see 77.21
- renting of commercial ships or boats without
crew, see 77.34
- operation of “floating casinos”, see 92.00
50.20 Sea and coastal freight water transport
This class includes:
- transport of freight over seas and coastal waters,
whether scheduled or not
- transport by towing or pushing of barges, oil rigs
etc.
This class also includes:
- renting of vessels with crew for sea and coastal
freight water transport
This class excludes:
- storage of freight, see 52.10
- harbour operation and other auxiliary activities
such as docking, pilotage, lighterage, vessel
salvage, see 52.22
- cargo handling, see 52.24
- renting of commercial ships or boats without
crew, see 77.34
52.22 Service activities incidental to water
transportation
This class includes:
- activities related to water transport of
passengers, animals or freight:
● operation of terminal facilities such as harbours
and piers
● operation of waterway locks etc.
● navigation, pilotage and berthing activities
● lighterage, salvage activities
● lighthouse activities
This class excludes:
- cargo handling, see 52.24
- operation of marinas, see 93.29
Marine Estate Research Report
Annex 1 Marine activities in SIC 2007
52.24/1 Cargo handling for water transport
activities
This subclass includes:
- loading and unloading of goods or passengers'
luggage travelling via water transport
- stevedoring
This subclass excludes:
- operation of terminal facilities, see 52.22
77.34/1 Renting and leasing of passenger water
transport equipment
This subclass includes:
- renting and operational leasing of passenger
water-transport equipment, such as commercial
boats and ships, without operator
This class excludes:
- renting of water-transport equipment with
operator, see division 50
- renting of pleasure boats, see 77.21
- financial leasing, see 64.91
32.30 Manufacture of sports goods
This class includes:
● sailboards and surfboards
● requisites for sport fishing, including landing
nets
33.12 Repair of machinery
This class includes the repair and maintenance of
- repair and maintenance of pumps, compressors
and related equipment
- repair and maintenance of fluid power machinery
- repair and maintenance of mining, construction,
and oil and gas field machinery
38.31 Dismantling of wrecks
This class includes dismantling of wrecks of any
type (automobiles, ships, computers, televisions
and other equipment) for materials recovery.
The following Classes include a substantial
marine element, and are cross-referenced from
the above class definitions:
42.91 Construction of water projects
This class includes:
- construction of:
● waterways, harbour and river works, pleasure
ports (marinas), locks, etc.
- dredging of waterways
01.70 Hunting, trapping and related service
activities
This class includes:
43.3 Building completion and finishing
This includes:
- Interior fitting of boats
- land-based catching of sea mammals such as
walrus and seal
13.92/2 Manufacture of canvas goods, sacks
etc.
This subclass includes:
- sails
25.99 Manufacture of other fabricated metal
products n.e.c.
This class includes:
- ship propellers and blades thereof
- anchor
26.51 Manufacture of instruments and
appliances for measuring, testing and
navigation
This class includes nautical systems and
instruments; nautical equipment, including
sonobuoys
27.40 Manufacture of electric lighting
equipment
28.11 Manufacture of engines and turbines,
except aircraft, vehicle and cycle engines
This class includes:
● marine engines
29.10 Manufacture of motor vehicles
This class includes:
● amphibious vehicles
49.50 Transport via pipeline
This class includes:
- transport of gases, liquids, water, slurry and other
commodities via pipelines
This class also includes:
- operation of pump stations
56.10 Restaurants and mobile food service
activities
This includes:
- Catering on ships provided by separate units
56.30 Beverage serving activities
This includes:
- serving beverage on ships by separate units
71.12/2 Engineering related scientific and
technical consulting activities
This subclass comprises the provision of surveying
and mapping services and the like.
It includes:
- geophysical, geologic and seismic surveying
- geological and prospecting activities:
● surface measurements and observations
designed to yield information on sub-surface
structure and the location of petroleum, natural
gas and mineral deposits and of ground water
- geodetic surveying activities:
● land and boundary surveying activities
● hydrologic surveying activities
● subsurface surveying activities
● cartographic and spatial information activities
Socio-economic indicators of marine-related activity in the UK economy
59
Annex 1 Marine activities in SIC 2007
72 Scientific research and development
77.21 Renting and leasing of recreational and
sports goods
This class includes renting of recreational and
sports equipment:
- pleasure boats, canoes, sailboats
- beach chairs and umbrellas
- commercial ships and boats without crew
84.24 Public order and safety activities
This class includes:
- administration and operation of regular and
auxiliary police forces supported by public
authorities and of port, border, coastguards and
other special police forces.
92.00 Gambling and betting activities
This class includes gambling and betting activities
such as:
- operation of casinos, including “floating casinos”
93.19 Other sports activities
This subclass includes:
- operation of sport fishing and hunting preserves
- support activities for sport or recreational hunting
and fishing
61.10 Wired telecommunications activities
This class includes the activities of operating,
maintaining or providing access to facilities for the
transmission of voice, data, text, sound, and video
using a wired telecommunications infrastructure.
The transmission facilities that carry out these
activities, may be based on a single technology or
a combination of technologies. This class also
includes the provision of Internet access by the
operator of the wired infrastructure.
64 Financial service activities, except insurance
and pension funding
64.91 Financial leasing
65.12 Non-life insurance
This class includes:
- provision of insurance services other than life
insurance:
● accident and fire insurance
● travel insurance
● motor, marine, aviation and transport insurance
● pecuniary loss and liability insurance
69 Legal and accounting activities
72 Scientific research and development
74.90/1 Environmental consulting activities
The following more general Sections include
some marine activities:
08.12 Operation of gravel and sand pits; mining
of clays and kaolin
This class includes:
- extraction and dredging of industrial sand, sand
for construction and gravel
- breaking and crushing of gravel
- quarrying of sand
- mining of clays, refractory clays and kaolin
33.19 Repair of other equipment
This class includes:
- repair of fishing nets, including mending
- repair of ropes, rigging, canvas
35.11 Production of electricity
This class includes:
- operation of generation facilities that produce
electric energy; including thermal, nuclear,
hydroelectric, gas turbine, diesel and renewable
35.12 Transmission of electricity
This class includes:
- operation of transmission systems that convey
electricity from the generation facilities to the
distribution system
60
75.0 to 82.0 Administrative and support service
activities
This includes:
79.11 Travel agency activities
79.12 Tour operator activities
84.22 Defence activities
This class includes:
- administration, supervision and operation of
military defence affairs and land, sea, air and
space defence forces such as:
● combat forces of navy
● engineering, transport, communications,
intelligence, material, personnel and other noncombat forces and commands
● reserve and auxiliary forces of the defence
establishment
85.4 Higher education
93.29 Other amusement and recreational
activities
This class includes:
- operation of recreational transport facilities, e.g.
marinas
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