Work force recruitment and the high cost of insurance and coastal property are among the major challenges facing the boat-building industry in Maine, according to a study released Tuesday.

A survey of 99 boat builders and boatyards was recently completed as part of Maine’s North Star Alliance Initiative, an economic development program funded by a $15 million grant from the U.S. Department of Labor. The goal of the initiative is to develop business and technology and create jobs in the boat-building and advanced composites materials sectors.

On Tuesday afternoon, Gov. John Baldacci held a press conference at the State House in Augusta to announce the results of the survey, which summarized the health of the boat-building industry and its opportunities for growth.

The survey findings included:

. Lack of affordable housing, high health and liability insurance costs and high wage and benefit expectations were listed as the top three barriers to work force recruitment and retention.

. High coastal property values and a shortage of workers with basic or specialized skills ranked highest as barriers to sustained business competitiveness.

. Most companies showed slight to modest revenue growth over the past three years. A slim majority, 52 percent, experienced annual sales growth between 1 percent and 10 percent, an additional 33 percent reported annual sales growth of more than 11 percent, and the remaining 15 percent experienced no revenue growth or a decline in sales.

. In the two years prior to the survey, 36 percent of the businesses surveyed had not experienced a net change in their number of employees, while 28 percent reported adding between one and four employees. Fifteen percent had between one and four fewer employees, and the remaining businesses were equally divided between those that gained more than 25 employees and those that lost between five and 24 employees.

. Just under half, or 47 percent, of respondents said they lack managerial expertise to adequately grow their company to the desired size.

. Most boat builders and yards plan to expand their market and product base as a means of remaining competitive. Of the eight strategies listed, the most popular were to increase marketing, expand existing production and upgrade the skills of the work force.

. A slightly smaller number of companies plan to diversify their existing product base into new, but closely related, products. Few companies identified an interest in expanding into international markets, engaging in new product R&D, or expanding into entirely new product markets.

. The report identified several potential new markets for business: military armaments and protection, wind blades, composite parts manufacturing, boat rentals and charters, new boating lines or models, engine repair and other service work.

Baldacci cited the Maine Advanced Technology Center, part of the Southern Maine Community College in Brunswick, as a resource for expanding education in the industry. He also praised the collaborative work of the University of Maine and Hodgdon Yachts, which used composite technology to create a new high-speed boat for the U.S. Navy SEALs.

“You take Pine Tree Economic Development Zones, UMaine’s Research and Development and Maine’s oldest industry and you put them all together, it’s a powerful combination,” Baldacci said in a telephone interview Tuesday.

For information on Maine’s North Star Alliance

Initiative, visit www.maine.gov/wired/index.shtml.

aravana@bangordailynews.net

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