The global shipbuilding industry is characterized by cyclic growth witnessing many crests and troughs since 1960s. The industry enjoyed a boom period from 2003-2007, while a sudden contraction was observed in the shipbuilding activities during 2008-2009 amid the severe economic and financial crisis, which engulfed the entire world. The market again collapsed in 2011 after a short stint of recovery in the prior year. The sluggish world shipbuilding market was reflective of weak economic fundamentals, eurozone debt crisis, and reduced availability of shipping loans. The shipbuilding outlook for 2012 appears bleak on account of continued volatility in the European capital markets, tighter ship financing, and continued fall in newbuilding prices.
Asian regions’ dominance in the global shipbuilding market continues unabated. China led the market with the largest orderbook in 2011, while Korea reestablished its leadership position in newbuilding order activity. At the same time, the emerging regions of the world such as India, Vietnam, Brazil, the Philippines, and Turkey display enormous growth potential and are constantly striving to compete for a larger share in the global market. The shipbuilding industry manufactures a wide variety of vessels serving varied purposes, of which bulk carriers, tankers, and container ships form the major categories. While, the offshore and specialized vessels market is also fast expanding in response to rapidly changing market scenario.
The global shipbuilding market is undergoing massive structural changes on account of contraction in the newbuilding activity and the growing need for business diversification in favor of offshore/onshore plants, offshore support vessels, etc. Furthermore, the focus area of investments by the large financial institutions is shifting towards energy related businesses over commercial shipbuilding. Moreover, research and innovation is at the core of shipbuilding industry, with companies, across the globe, remain focused on introducing technologically advanced and eco-friendly products. Despite the unfavorable near term outlook, certain factors will prove to be growth catalysts for the global shipbuilding market, including increasing oil demand and rising natural gas consumption. Driven by the same, along with other factors, the global shipbuilding market is expected to resume growth from 2013 onwards.
Shipbuilding Tribune Staff, September 26, 2012