WAVES OF PROGRESS:The Economic Importance of Missouri’s Waterways

Presented by:

Marty Romitti, Ph.D., MERIC Director

Missouri River Freight CorridorDevelopment Conference

December 10, 2009Rocheport, Missouri

“The Perfect Storm” a 2000 Warner Brothers film

Everyone has a plan

'till they get punched in the mouth.

-- Mike Tyson

Mike Tyson vs. Frank Bruno, 1989 B. Martin/ALLSPORT

Sources: U.S. Bureau of Labor Statistics and MERIC

More than 279,000 Missourians are looking for work.

Disasters State has received nine (9) Presidential Disaster Declarations

• December 6-15, 2007 Ice Storm• January 7-10, 2008 Tornadoes• February 10-14, 2008 Ice Storm• March 17-May 9, 2008 Flooding• May 10-11, 2008 Tornadoes• June 1-August 13, 2008 Flooding• September 11-24, 2008 Tornadoes & Flooding• January 26-28, 2009 Ice Storm• May 8-16, 2009 Tornadoes & Flooding All but seven (7) of Missouri’s 115 counties have been under a Presidential Natural Disaster Declaration since the recession began. Some counties multiple times.

Automotive Employment on the Decline

Sources: U.S. Bureau of Labor Statistics and MERIC

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U.S. and Missouri Payroll EmploymentManufacturing and Motor Vehicle Manufacturing

Index: 2003 annual average = 100

US Mfg MO Mfg US Motor Vehicle Mfg MO Motor Vehicle Mfg

US MO US MOTotal Nonfarm Payroll 130,848,000 2,714,500 0.6% 1.1%Manufacturing 11,675,000 261,400 -18.6% -16.5%Motor Vehicle Manufacturing 663,700 6,100 -40.7% -63.9%

Percent Change Oct 2003 - Oct 2009

Source: MERIC

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-20,600

-24,200

-13,700

-1,500 -3,100

-13,000

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Missouri Employment Change by SectorOctober 2008 - October 2009

Mining and Logging

Construction

Manufacturing

Trade, Transport & Utilities

Information

Financial Activities

Professional & Business Svcs

Educational & Health Services

Leisure & Hospitality

Other Services

Government

Manufacturing Drops Most in Recent Months

Missouri had an entrepreneurial activity rate of 150 businesses established per 100,000 adults, less than half the national average and second lowest among the states.

Source: Kauffman Index of Entrepreneurial Activity 1996-2008

New Business Development Lags

Latest economic data indicate initial “wave” of recovery following the flow of the Missouri River.

Illegal Gambling

Missouri’s Economy:

• Big• Diverse• Centered

Missouri’s Economy is bigger than some countries, including Portugal and New Zealand.

More workers in state than entire populations of 31 U.S. states.

Big

Source: U.S. Bureau of Economic Analysis

Trade, Transportation and Utilities, 18.9%

Financial Activities, 15.2%

Manufacturing, 13.5%

Professional and business services, 13.5%

Government, 12.4%

Education and Health Services, 9.2%

Information, 4.7%

Construction, 4.2%

Leisure and hospitality, 4.2%

Other Services, 2.6%Natural Resources (includes

Agriculture) and Mining, 1.7%

Industry Share of Missouri’s Economy(by percentage of Gross Domestic Product, 2008)

Diverse

The Perfect Center

Within 500 miles of:

• 43% of U.S. population • 41% of total U.S. effective buying income• 39% of total U.S. retail sales• 41% of total U.S. service industries • 44% of total U.S. manufacturing establishments

Missouri has the sixth largest highway system in the U.S., two of the largest rail terminals, and more than 1,000 miles of waterways. Our state is a hub of business activity with over 160,000 tons of cargo and 20 million airline passengers transported by air each year.

Missouri is located near the country’s geographic and population centers and is a virtual “next-door-neighbor” to at least 20 states. Our state’s proximity also allows for efficient “quick shipping” to markets all over the world.

The state has consistently been ranked as one of the best for manufacturing and logistics.

Missouri’s economy, to truly thrive in the long-term, must be diverse, global, and competitive.

International sales by Missouri companies totaled $12.8 billion in 2008.

Missourians sold goods to 197 countries around the world.

Think Regionally…Sell Globally

Source: WISER

Over 95 percent of cargo entering the U.S. comes by ship.

One container in every ten is bound for or originates in the U.S.

By 2020, the total volume of cargo shipped by water is expected to double.

Sources: US DOT, US Maritime Administration, American Association of Port Authorities

Think Regionally…Sell Globally

Goals out of Left Field

Seventy percent (70%) of Missouri’s economy is located within a half-hour

drive of the Missouri and

Mississippi Rivers

Wave 1

Missouri industries that export by barge produce substantial value. The nearly $1 billion in shipments annually supports over 75,000 jobs, $100+ million in state general revenue, and adds $1.5 billion annually to our Gross State Product.

Source: “The Economic Value of Investment in Freight Transportation: Missouri Ports”, October 2008.

Wave 2

Sources: TREDIS, FHWA, IMPLAN and MERIC

Missouri’s waterways will remain valuable to the state’s economic development efforts.

However, we have only scratched the surface of the economic potential of our waterways with just 4.6% of potential waterway shipments in MO making use of the rivers as a for instance.

Wave 3

Source: U.S. Army Corps of Engineers, mapping by MERIC

Wave 4

Offer Complete Multi-Modal Transportation/Logistics System

Wave 5

Diversity There is a wide & growing range of green activities by industry segment and across the supply chain.

Adaptation Much of the green activity builds on existing industry strengths and extends them into new markets.

Specialization Each state has different potential strengths & specializations.

Promote New & Emerging Industry Opportunities

Renewable potentials vary considerably by geography

Source: NRELSource: NREL

Wave 6

Water and Economic Development

Source: whyfiles.org

Prepare for the Future

The Curse of KnowledgeThe $1 Billion Challenge!

How to best use our waterways to maximize their contribution to economic prosperity in Missouri and for our neighbors across the Central U.S.?

THANKS!

www.missourieconomy.org