Shipbuilding Buying Power
I’ve long had the sense that carriers and ships, in general, are becoming more expensive on a relative basis and, if true, I can’t explain why. The basic modern carrier hasn’t changed much since the Nimitz was built. Yes, the design is continually being tweaked with rearrangements of gear and whatnot but that would have no major impact on the cost of a ship. So, is the carrier more expensive today, on an inflation adjusted basis, than it used to be? Here’s some data.
Carrier Cost Year Inflation Adj.
CVN-69 (Eisenhower) $679M (FY1970) (4) / $4.2B (FY2016)
CVN-72 (Lincoln
CVN-76 (Reagan) $4.4B (FY1995) (2) / $7.0B (FY2016)
CVN-77 (Bush) $6.0B (FY2006) (2) / $7.2B (FY2016)
CVN-78 (Ford) $12.9B (FY2016) (3) / $12.9B (FY2016)
Note: Costs adjusted to FY2016 dollars using CPI Inflation Calculator
Note: Solid data is hard to come by for individual carriers. Many sources cite a single, averaged price for the entire Nimitz class which is obviously not true for any individual member of the class. My references for each cost cited are listed so you can check for yourself.
We see that the inflation adjusted cost of a carrier has risen steadily since 1970. Given that the basic carrier hasn’t changed, the cost ought to have remained steady or even dropped due to the oft claimed, but almost never realized, serial production savings. In reality, however, the costs have increased. Why? I have no good answer for that.
Here’s another way to look at it. Below is the Navy’s annual shipbuilding budget (SCN) for 1986 and 2015 and their inflation adjusted 2016 equivalents along with the quantity of ships built under that budget. You’ll instantly note the huge difference in quantity between the 23 ships that were built under the 1986 budget and the meager 9 ships built under the 2015 budget.
On an average cost basis in 1986, we built 23 ships for $21.8B (infl. adj.) which is an average of $0.95B per ship. Compare that to the 9 ships built under the 2015 $16.2B (infl. adj.) budget which is an average of $1.8B per ship.
Year Qty SCN Inflation Adj. SCN
1986 23 $ 9.9B (FY1986) (1) / $21.8B (FY2016)
2015 9 $15.9B (FY2015) (6) / $16.2B (FY2016)
So, our shipbuilding buying power has decreased markedly. The average ship used to cost $0.95B but now costs $1.8B. That’s a doubling in inflation adjusted costs!!!! Our buying power is vanishing!
Here’s yet another way of looking at it. Interpolating the data, a single carrier in 1986 would have cost around $6B from an annual shipbuilding budget of $9.9B in 1986 dollars. Thus, the carrier consumed 61% of a single year’s shipbuilding budget back then. Today, a carrier costs $12.9B from an annual shipbuilding budget of $16.2B, consuming 80% of the budget. Our aircraft carrier buying power has decreased. It takes more of the budget to buy a carrier – 80% now, versus 61% then.
Yes, the Ford is a departure, to an extent from the Nimitz and, therefore, costs more, you say. While that’s true, we haven’t actually gained anything from the greater expense. The Ford offers no improvements. We’ve debunked the increased sortie myth. The Dual Band Radar has been abandoned and offered no tactically useful benefit, anyway. The EMALS catapult, if it works, offers no actual advantage and is an unshielded electromagnetic beacon which is a significant liability. The AAG arresting gear also offers no advantage. In terms of buying power, we’ve spent enormously greater money on the Ford for little or no gain. That’s a huge loss in buying power.
This post is not just about the Ford. The trend in decreasing buying power for both ships, in general, and carriers, in particular, was evident before the Ford. This general loss of buying power is the point of the post.
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(1)CBO, Future Budget Requirements For The 600-Ship Navy: Preliminary Analysis, Staff Working Paper, April 1985
(2)Congressional Research Service, “Navy CVN-21 Aircraft Carrier Program:
Background and Issues for Congress”, Ronald O’Rourke, 17-Jan-2007
(3)Congressional Research Service, “Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress”, Ronald O'Rourke, May 27, 2016
(4)Wikipedia, retrieved 25-Oct-2016 ,
(5)Wikipedia, retrieved 25-Oct-2016 ,
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