Economic Impact of Maryland Boating in 2006
Douglas W. Lipton - Marine Economic Specialist
The University of Maryland's Sea Grant Extension Program and Department of Agricultural and Resource Economics has developed an economic impact model of the Maryland recreational boating industry using survey data from 1993 and 2000. The model was designed to be updated annually by obtaining new information from Maryland DNR on boat registrations by various size categories for powerboats and sailboats, and depending on whether the boats are trailered or kept in the water. The complete methodology and data analysis is available from the author.
Boat Registrations and Boat Sales Down Slightly in 2005
For the second straight year, the number of boats registered or documented for principal use in Maryland declined slightly. According to figures provided by the Maryland Department of Natural Resources (DNR), there were 208,837 boats in 2006, a decline of 1% compared to 2005. The number of personal watercraft (PWC) has increased at an average annual rate of over 3% since 2001, and this trend continued in 2006 with an increase of 920 units. One piece of good news for the marine trades industry was the decline in powerboats was accompanied by a shift from trailered boats to inwater boats which have a greater economic impact on the industry. Sailboats have declined at an average annual rate of over 3% since 2001, but the decline actually accelerated in 2006 with a loss of 5.4% compared with 2005.
Based on DNR excise tax attainment figures, boat sales rose 2% compared to the previous fiscal year. Excise tax attainment from boat sales reached a record $29.8 million in 2006.
Boater Spending Increases1
Total nominal spending including new and brokered used boat purchases by Maryland's recreational boaters increased 4.4% to just over $2.5 billion in 2005. These figures include boaters who live out-of-state, but have their boats registered in Maryland. A small portion (5%) of the spending by out-of-state boaters occurs in the boater’s home state and is not included in the impact analysis of boater spending on Maryland's economy.
| 2002 |
2003 |
2004 |
2005 |
2006 |
|
| Total Spending |
$2,045,600 |
$2,124,049 |
$2,222,692 |
$2,394,503 |
$2,500,993 |
| Spending in Maryland |
$1,932,932 |
$2,006,997 |
$2,100,933 |
$2,261,910 |
$2,362,122 |
The following table show annual and trip-related expenditures by boat type. They do not include expenditures on new or used boats purchases, which were included in the preceding table.
| 2002 |
2003 |
2004 |
2005 |
2006 |
||
| PWC |
Expenditures |
$111,859 |
$116,162 |
$119,489 |
$124,807 |
$129,000 |
| # of Boats |
17,110 |
17,780 |
18,272 |
19,133 |
19,737 |
|
| Power |
Expenditures |
$1,383,907 |
$1,398,787 |
$1,413,041 |
$1,495,601 |
$1,524,540 |
| # of Boats |
176,896 |
176,842 |
176,694 |
175,530 |
173,683 |
|
| Sailboats |
Expenditures |
$107,445 |
$105,356 |
$103,033 |
$107,445 |
$120,219 |
| # of Boats |
15,087 |
15,018 |
14,794 |
14,639 |
13,859 |
|
Although power and sailboat numbers have decreased every year, expenditures have gone up, partly due to inflation, but also due to shifting of boats in different size categories and whether they are trailered or kept in the water.
The Impacts of Boater Spending
Depending on the spending category, for each dollar that is spent by Maryland registered boaters in Maryland, a certain percent "leaks" outside the state borders. The amount that remains in Maryland is used by the supporting industries to create jobs and income and goes towards purchases in other sectors of the economy. The results of the initial and additional rounds of spending are the total impacts.
| 2002 |
2003 |
2004 |
2005 |
2006 |
|
| Total Employment |
25,282 |
26,166 |
27,069 |
27,754 |
31,755 |
| Total Income |
$916,763 |
$949,584 |
$982,982 |
$1,006,999 |
$1,142,436 |
| Total Output |
$1,449,445 |
$1,501,827 |
$1,556,655 |
$1,594,017 |
$1,797,626 |
Boating remains an important component of the Maryland economy. Approximately, every 6.5 boats registered in Maryland leads to more than one full-time job somewhere in the state's economy and each boat contributes on average about $8,600 a year in economic activity. In 2006 the Gross State Product for Maryland was $258 billion (Bureau of Economic Analysis) with boating contributing $1.8 billion. Similar sized "industries" include Printing and Publishing ($1.7 billion) and Computer and Electronic Equipment Manufacturing ($1.6 billion). The Gross State Product from farming, fishing and hunting is only $760 million.
The above figures do not include the spending of transient boaters, boaters that visit Maryland, but do not register their boats here. In 2005 we published a study based on transient boater spending in 2004. Adjusting those numbers for 2006, we estimate an additional impact on the Maryland economy of $198 million and an additional 2,797 full time equivalent jobs from transient spending. Thus, the total impact on the Maryland economy for 2006 is estimated to be about $2 billion and 34,552 jobs.
1 - All dollar figures presented in the tables are in $1,000 of dollars, and are not adjusted for inflation.
You may download a copy of this report(~80kb pdf file). It requires Adobe Acrobat Reader.
For further information contact:
Douglas W. Lipton
301-405-1280
Internet: lipton@mdsg.umd.edu
September 2007
