SUSTAINABLE WORKING WATERFRONTS TOOLKIT
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An Overview of the U.S. Ocean Economy

Waterfront communities in the United States, whether rural or urban, recreational, commercial or industrialized, have been subject to economic, technological, ecological, and demographic changes that challenge their continued existence or development. While many of these changes are documented throughout this website, here we analyze and describe facets of the U.S. ocean economy, which is defined by the National Ocean Economics Program to include six major sectors or industry groups: Marine Construction, Marine Living Resources, Offshore Minerals, Ship and Boat Building and Repair, Coastal Tourism and Recreation, and Marine Transportation.

To help promote the long-term prosperity of coastal communities and their Working Waterfronts, it is essential to document their current economic status and future prospects. The work introduced here does so by providing a comprehensive evaluation of all ocean related economic activity for eleven coastal regions of the United States. The information that follows provides just a brief glance at the state of the U.S. ocean economy and some of its specific sectors. In the pages that follow, we provide links that allow readers to explore the detailed economic information and results that are contained in the full report. We also provide an example – using Duval County, Florida – of how the data and economic analyses in the report can be applied to specific localities.

Numbers of people employed, the wages they earn, and overall contributions to Gross Domestic Product (GDP) are primary measures used to gauge the size and importance of our nation’s ocean economy. However, it is important to note that these measurements, while vital to making good decisions and planning for the future, often are inadequate to convey the overall significance of Working Waterfronts to the thousands of local communities where they are found and, indeed, to generations of families they sustain. Our nation was founded on its working waterfronts and they continue to embody our early traditions and heritage, as is portrayed in the case studies contained on this website. That said, we now turn our attention to a glimpse of our nation’s ocean economy.

Current Status
The current status (as of 2009) of ocean related economic activity in our nation’s waterfront communities was evaluated in terms of its share of the total U.S. economy, as well as that of the overall economies of 11 coastal regions, 30 coastal states, and 444 coastal counties (of 3,033 U.S. counties in total). First, we evaluated impacts that result from what is sometimes called ‘first round’ spending, which includes, for example, wages paid by business owners to their employees, as well as money they spend on goods and services to run and/or expand their businesses. Next, we evaluated the economic ripple effect that first round spending catalyzes. This economic multiplier effect occurs as employees and other businesses “re-spend” the wages and payments they receive. The overall result is that every $1 of first round spending helps grow and expand the economy even more as dollars are “re-cycled.”

Nationally, ocean related economic activity in 2009 accounted for 130,855 businesses, with 2.398 million full-time and part-time employees, who received $84.25 billion in wages and benefits, and produced $217.87 billion in GDP. In terms of relative importance to the overall U.S. economy, this represents 3.37 percent of total GDP and 4.81 percent of total employment. When accounting for multiplier or ripple effects, total economic contributions of ocean related activities in all U.S. coastal counties amounted to 6.74 million jobs, $283.5 billion in wages, and $643.9 billion in value-added or GDP. These total contributions for the ocean economy represented 2.8 to 3.4 times the direct effects attributed to first round spending alone.

Regional Differences
The relative significance of the ocean economy varies from region to region, state to state, county to county and, indeed, from community to community. For example, as shown in the figure below, while the share of ocean related employment (jobs) is a significant component of the economies of all states, it does vary widely. States with the highest share of total employment in ocean-related activities in their coastal counties, at more than 12 percent, were Hawaii, South Carolina, and Alaska, followed by Alabama, Georgia, Louisiana, Maine, Mississippi, and North Carolina with more than 8 percent. More than half of the ocean related jobs in these states were in the relatively labor-intensive tourism and recreation industries. In some individual counties, especially in the western Gulf of Mexico and in Alaska, ocean related economic sectors represent over 50 percent of total GDP and employment.

Nationally, ocean economy wages in 2009 averaged $35,127 per job but, again, there are regional variations. In particular, note that while 9.9 percent of all U.S. ocean economy jobs are in the Western Gulf of Mexico, the region accounts for 23.7 percent of all ocean wages, indicating that, on average, ocean economy workers in this area of the country earn considerably more than do those elsewhere. Furthermore, the Western Gulf of Mexico’s share (38.3%) of the U.S. ocean economy Gross Domestic Product is over two and a half times that of California, the region with the second largest share at 14.1 percent.

In terms of ocean-related jobs, the North Atlantic region leads the U.S., accounting for 18.3 percent of all employment in the U.S. ocean economy (table). California follows with 17.8 percent of all ocean-related jobs, and then comes the Middle Atlantic region with 13.5 percent. In terms of ocean economy wages, California accounts for 18.3 percent (the Western Gulf of Mexico is first with 23.7%), followed by the North Atlantic region with 15.3 percent. Lastly, California also is second in terms of its share of U.S. ocean economy GDP at 14.1 percent (the Western Gulf of Mexico is first with 38.3%), again followed by the North Atlantic region with 12.1 percent.

The Total Gross Domestic Product contribution of the ocean economy in 2009 ranged from $11.3 billion from the Living Resources sector to $253.7 billion from the Tourism & Recreation sector (table). Tourism & Recreation accounted for 39.4 percent of the ocean economy, followed by Offshore Minerals (28.9%), and Marine Transportation (21%) (table). Ship & Boat Building accounted for 6.0 percent and Living Resources and Marine Construction for 1.7 and 2.9 percent, respectively. Of particular note, Offshore Minerals accounted for the bulk of GDP in the Western Gulf of Mexico and Alaska regions, whereas Tourism & Recreation is the dominant sector in eight of the eleven U.S. coastal regions.

Future Prospects
In addition to understanding the current status of the ocean economy, it is important for communities to have an idea as to the future prospects of their working waterfronts. To that end, the top 50 counties were identified with the greatest predicted negative change in the GDP of an ocean economy sector between now and 2020. Essentially, given recent trends, all economic activity is expected to cease within these county specific ocean sectors by the year 2020. The GDP values in 2009 for the 50 counties ranged from about $8,000 in the Living Resources sector of Arlington County Virginia, to $25 million in the Marine Construction sector of Middlesex Massachusetts. Though the GDP values shown in the table may seem relatively small when compared to the overall U.S. economy, obviously they are highly significant for those community members who rely on the jobs and wages they provide.

Expected growth in ocean economy sectors also is an important consideration for adequate planning. The top 50 U.S. counties were identified with the greatest predicted positive change in the GDP of an ocean economy sector between now and 2020. The GDP of these 50 county-level ocean sectors is expected to grow between 114 and 500 percent by 2020. Harris County Texas is expected to experience the greatest absolute growth with an increase of about $67 billion in the value of its Offshore Minerals sector. Chowan County North Carolina likely will experience the greatest relative change (+500%), as its Ship & Boat Building sector expands from a value of $9 million in 2009 to $52 million in 2020.

High Profile Industries
Economic data also were gathered on specific high profile industries such as marine cargo shipping, commercial fishing, and passenger cruise ships. Data for the Great Lakes was available for marine cargo shipping, but not for commercial fishing and cruise ship passenger volumes. A few salient facts for each of these industries follow.

Marine cargo shipping remains one of the largest water-dependent activities in the U.S. The total tonnage of marine port shipments for all waterfront counties increased from about 1.16 billion tons in 1997 to over 1.51 billion tons in 2010, or about 30 percent, and is forecast to increase to nearly 1.9 billion tons in 2020. The total value of marine port shipments in all U.S. waterfront counties increased from $961 billion in 1997 to just under $1,640 billion in 2010 (+71%), and is forecast to be about $2,364 billion in 2020.

Examination of trends between 1997 and 2010 for ports within particular coastal states and regions provides insights of what to expect in the future. For example, the total tonnage shipped increased for all four states belonging to the Atlantic South region: by 17 percent for South Carolina ports, to a high of 147 percent for Georgia ports. In contrast, total tonnage shipped from ports in five of the six states belonging to the Great Lakes West region declined: ranging from -24 percent for Wisconsin ports to -86 percent for Minnesota ports. Western Michigan was the only state in the region that experienced an overall increase (49 percent).

The tonnage shipped from the Port of Tacoma in Pierce County Washington—which is the subject of a case study on this website—increased by 37 percent between 1997 and 2010, from 15.5 to 19.2 million tons. A total of 34.8 million tons are forecast to be shipped in 2020, with a value of $45.5 billion, up from $31.3 billion in 2010.

 Landing Values Graph
Click on image to view larger.
Commercial fishing is an economic activity traditionally associated with working waterfront communities, but its sustainability is threatened in many areas of the U.S. The total landings in 2010 by commercial fisheries in the U.S. were 4.5 billion pounds with a value exceeding $2.70 billion, which represents a decrease of 17 percent and 18 percent, respectively, since 1990.

When we compare changes from 1990 to 2010 in the landed weights and values for those U.S. coastal regions for which sufficient data were available, we see interesting distinctions. For example, the Atlantic-Middle region experienced a 37 percent decline in landed weight, but a 12 percent increase in landed value. Middle- and North-Atlantic weights were down as result of declining quotas for key groundfish species as well as southern flounder, scup, and spiny dogfish. The offsetting regional landed value increases arise primarily from increasing yields/values of American lobster in the north Atlantic; and Atlantic sea scallops in both the Middle- and North Atlantic regions.

Landed weight in Alaska increased by 28 percent, while total landed value decreased by 11 percent. Alaska value went down because salmon fisheries prices to fishermen were on a downward trend from 1994 to 2006 due to competition with cheap farmed salmon. Weight increase was due to increased landings of Alaska pollock and cod.

The Pacific-Northwest was the only region to experience increases in landed weight and value, 45 percent and 20 percent, respectively. The Pacific-Northwest saw increases in weight and price due to rationalization of the halibut fishery in Alaska. Once individual fishing quotas were implemented, more of that fish was brought south to Bellingham and Seattle for processing.

Ocean-going cruise ships have become one of the premier venues for coastal tourism and recreation. Cruise ships calling at U.S. ports reported a total of 49.1 million passenger-nights in 2011; however, this represents an 11.8 percent decrease from a total passenger volume in 2004 of 55.6 million. During this eight year period, cruise passenger volumes increased for three regions: the Atlantic-North by 1.9 percent, the Atlantic-Middle by 30.1 percent, and the Pacific-Northwest by 56.5 percent. The Atlantic-South region—with the cruise ship ports of Fort Lauderdale, Miami, Port Canaveral and Jacksonville, in Florida, and Charleston in South Carolina—accounted for 48 percent of all passenger volume in the U.S.

Additional Information
The following links provide additional, more detailed information on the analysis of our nation’s ocean economy and working waterfronts. We also provide an example – using Duval County, Florida – of how the data and economic analyses in the report can be applied to specific localities.

Literature Review – Data resources and previous studies of ocean economic activity are discussed, touching upon sources of ocean and coastal economic data, statistical and economic surveys, economic impact studies, and studies of structural changes and development.

Data Sources and Methodology – The nature and scope of available data by industry, geographic area, and source is discussed, as well as the procedures used to inventory the current status of, evaluate the importance of, and measure changes in the portion of the U.S. economy that is related to ocean- and coastal-related activities and industries.

Economic Analysis Results – Presents the results of the data inventory and economic contribution analysis, as well as predictions of coastal economic activity in 2020.

Duval County, Florida Example – An example of how to use the data that is available for the economic analysis of U.S. working waterfronts.

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