Warship Business Gives Boost to UK Economy

Portsmouth, UK – A report published today has revealed that BAE Systems Surface Ships, formerly BVT Surface Fleet, added almost £600 million to the UK economy and supported almost 15,000 jobs last year, demonstrating the economic and social value of the warship industry to the UK.

The study by the University of Strathclyde’s Fraser of Allander Institute examines the direct and indirect economic impact of the warship business, recently brought under full ownership of BAE Systems. It covers employment, wages, turnover and contribution to Gross Domestic Product (GDP) for BAE Systems Surface Ships’ operations in Glasgow, Portsmouth and Filton for the year 2008/09*.

Key findings for BAE Systems Surface Ships:

• Total turnover generated amounted to £1.12 billion
• Its operations contributed £231 million directly to GDP, with an additional £366 million created in the wider economy through the knock-on effects of wage and supplier payments
• It employed around 6,700 people directly across its UK sites, with a further 8,200 supported elsewhere in the UK
• This means that for every 100 people employed directly, a further 122 jobs were supported in the wider economy
• The business generated a total of £426 million worth of wages across the UK, including £199 million paid directly and re-expenditure accounting for a further £227 million
• Every £100 paid directly in wages to its employees supported a further £111 worth of wage income elsewhere in the UK

Alan Johnston, Managing Director of BAE Systems Surface Ships, commented: “The findings of the study demonstrate that our business and the warship industry continue to thrive in the UK and the number of people who benefit from the shipyards continues to increase year on year.

“Despite the current economic climate, we have seen significant growth in the past year and have the strongest future order book that this industry has seen in many years. Our long-term partnering agreement with the Ministry of Defence will help to sustain key industry capabilities in the UK and we will continue to invest in our people and facilities to ensure that, as part of BAE Systems, we remain at the heart of British industry.”

The report reinforces the importance of BAE Systems’ commitment to working closely with its supply chain and industrial partners to drive innovation, enhance efficiencies and develop the skills necessary to ensure the long-term contribution of the warship industry to the UK economy. Its Surface Ships business has quadrupled its commitment to research and development to £2.5 million and continues to invest in skills to provide a strong base for its future domestic and export business.

The Fraser of Allander Institute is a research unit of the University of Strathclyde in Glasgow. The Institute carries out research on regional issues generally and the Scottish economy in particular, including forecasting and the analysis of short-term and medium-term movements in Scottish economic activity.