Australia's economy stands to lose $29 billion if the Navy's next fleet of submarines is built overseas, the South Australian Economic Development Board says.

The board released a report ahead of a Senate inquiry into naval shipbuilding to be held in Adelaide tomorrow.

It claimed 140,000 "man years" would be lost to Australian workers over a 40-year period if the submarines were built offshore.

It further claimed the national economy would be boosted by $20 billion if they were built locally.

Chairman Raymond Spencer said the board had looked past the "one-off" purchase price of a submarine.

"We were concerned that decisions were getting made without an adequate analysis of the broad-based impact on the national and the state economy," he said.

"We felt that we had to look at it over the long term rather than simply look at it."

The Federal Government had in recent months backed away from a pledge to continue building submarines in Adelaide and was reportedly on the verge of signing a deal to buy 10 Soryu-class submarines from Japan.

"Importing Australia's next generation of submarines would really be an economic mistake, not just for South Australia but for Australia," Mr Spencer said.

State Defence Industries Minister Martin Hamilton-Smith was to appear before the Senate inquiry tomorrow.

"From today's economic report, it's quite clear we won't save money, we will lose money," he said.

He expected the Federal Government to make a decision early next year.