Scottish shipbuilding revival could boost economy by £342m a year

The latest analysis from finance expert, RIFT has shown that despite the steep decline from the glory days of the 1900s, Scotland’s shipbuilding industry has remained steadily consistent in recent years; however, a push to rebuild the sector could bring a potential boost of £342 million to the Scottish economy.

In the early 1900s, it’s thought that a fifth of the world’s ships were built on the River Clyde in Glasgow but following high demand during both the First and Second World War, the industry has since declined rapidly, due to competition from other nations such as China, Japan and Korea.

Analysis of the latest government figures by RIFT shows that in 2021, the Scottish shipbuilding sector employed just 6,700 workers, accounting for just 0.36% of total Scottish employment figures, with just an estimated six ships built over the course of the year, all of which were either workboat or fishing vessels.

This employment figure sits 12% below the highest peak of the last decade when 7,600 workers were employed in 2017; however, it has been steadily climbing in recent years.

In fact, between 2017 and 2019, the number of workers within the sector fell from 7,600 to 6,200, the lowest number seen over the last decade.

However, since then this number has climbed steadily to the 6,700 recorded in 2021 and while this may be a drop in the ocean compared to the glory days of the early 1900s, Scottish shipbuilding remains a billion pound sector, turning over £1.022 billion in 2021 to be exact.

Almost £400 million went towards boosting the Scottish economy in 2021 (Gross Value Added) and shadow chancellor, Rachel Reeves, recently stated that under a Labour government, more ships would be built in Britain, bringing a further boost to the Scottish shipbuilding sector.

RIFT’s analysis shows that over the last decade, the total turnover per employee within the Scottish shipbuilding sector has averaged £180,119, while the average gross value added per employee sits at £55,309 over the last 10 years.

If employment numbers were to double from the 6,700 seen in 2021 to 13,400, this would push the total turnover of the Scottish shipbuilding industry to £2.414bn, with gross value added to the Scottish economy via the sector increasing to £741m per year – a boost of £342m versus the annual total GVA seen in 2021.

Bradley Post, MD of RIFT, commented:”Scotland is a fiercely proud nation and this is certainly no different when it comes to the nation’s proud history of shipbuilding, as demonstrated by the fight to keep the sector alive by the workers, in particular, in recent history.

While the industry today remains a far cry from its glory days of the 1900s, it has, at least, benefited from calmer waters in recent years, with employment figures remaining fairly consistent and the sector still turning over a billion pounds a year.

Should Labour come to power and make good on its promise to bring shipbuilding back to Britain, the sleeping giant of the Scottish shipbuilding industry could awaken once again and even just a doubling of the current workforce could bring a sizable boost to the nation’s economy.