Future economic development in Wales could be spearheaded by big business investment on the Milford Haven Waterway - but this is largely dependent on these investors receiving support and purposeful regulation to help them compete internationally in the future.

This is one of the main conclusions of a new report from Cardiff University's Welsh Economy Research Unit (WERU), released just weeks after the Welsh Government's announcement that it wishes to develop the Haven Waterway as a new Enterprise Zone.

An Analysis of Economic Activity Dependent on the Milford Haven Waterway was carried out on behalf of Milford Haven Port to look at the role commerce on the Waterway could play in the future. It finds that oil, gas and power activities remain the main contributors, providing 30 per cent of the 4,000 local jobs underpinned by the port and delivering 60 per cent of the £324 million 'value added' injected into the Pembrokeshire economy each year by activities dependent on the Waterway.

However, it also highlights the considerable opportunities the area presents to safeguard the UK's future energy supplies and develop low carbon energy technologies - but warns that the increasing burden of legislation and planning could slow development in all sectors and hamper future investment.

Professor Max Munday, the report's author, said: "The role of the energy processing sector in the Haven in supporting Welsh manufacturing output and exports should not be underestimated, particularly at a time when many other manufacturing sectors in Wales have seen falling activity; this is an area where the Welsh Government could gain advantage by providing support and guidance," he explained.

"The implications of a downturn in the sector are significant. The energy sector supports relatively high paid and highly skilled work directly and indirectly in the local economy. Losing these industries would have a huge impact on Pembrokeshire; the oil and gas sector is significant to the economic prosperity of Wales as a whole and to the UK's energy security."

Colin Orr Burns, general manager of Dragon LNG, said the Haven constituted the UK's single largest cluster of energy-related industries, and the report emphasised the regional and national importance of this cluster.

"It highlights not just the multi-billion pound direct investment in facilities, but also the considerable spin-off benefits in terms of indirect jobs and the development of expertise among the local contractors," he said.

"As such, it is a timely reminder of the increasingly important role this part of Wales plays - not just because of the potential for future growth in the area, but also the risks should its international competitiveness and attractiveness to new investment not be maintained.

"It is therefore encouraging to note this has been recognised by the recent decision to include the Haven Waterway as a proposed Energy Enterprise zone in Wales. Milford Haven Port Authority is to be commended for taking the initiative to commission this significant report."

Milford Haven Port's chief executive, Alec Don, added that the report highlighted the ripple effect of investment in the area, and the Waterway's strategic importance on a much wider scale.

"Gas, oil and power will remain pivotal, but there is significant potential for developing low carbon technologies. We also have the benefit of access to deep water berthing, which opens up considerable opportunities for larger container or cargo vessels, and potentially cruise ships.

"But to make this happen, we need to focus on creating a positive environment for those who want to invest in the area as this can only help Wales and the UK's long term economic prospects. That's why the recent Enterprise Zone announcement is so welcome, and we look forward to working with our partners to further progress the possible designation of the Milford Haven Waterway as an Enterprise Zone in due course."

A copy of the full report can be downloaded from http://www.mhpa.co.uk">www.mhpa.co.uk, as well as a short summary of the report's findings.