The cost of building naval ships in Australia is generally 30 to 40 per cent more expensive compared to foreign shipyards, a Government-commissioned study has found.

Since September the RAND corporation in the United States has analysed Australia's shipbuilding capabilities, comparing it with similar overseas operations and assessed the economic costs and benefits of Government investment in the sector.

The report concludes production of naval warships in Australia involves a "30 per cent to 40 price premium over the cost of comparable production at shipyards overseas", but finds "this premium could drop over time".

According to RAND's report, sustaining a naval shipbuilding industry will require specific steps including a new "continuous build strategy".

"The economic benefits of a domestic naval shipbuilding industry are unclear and depend on broader economic conditions," the report concludes.

"That said, the industry could potentially employ more than 2,000 people in long-term positions".

The Government will release the full report on Thursday and said it expects it to generate a critical conversation about the future of the naval shipbuilding industry in Australia.

Last month Defence Minister Kevin Andrews said Australia's shipbuilding industry needed "to step up to meet the challenge of building a sustainable naval sector".

"The only way Australia can continue to have a naval shipbuilding industry is if the industry is properly structured to drive efficiencies and improve productivity," Mr Andrews told Australia's Future Surface Fleet Conference in Canberra.

"This will require hard decisions, and a commitment to a productivity-based culture from all parties - including unions."