Marine Industries Global Market Analysis - Marine Institute

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106 MARINE INDUSTRIES GLOBAL MARKET ANALYSIS 19.2 WORLD MARKET The world value of the industry is estimated at €2.7 billion in 2004, with Japan being the largest producer.The sector is dominated by the production of aggregates which are supplied to local markets, with offshore dredging reducing the need for onshore pits so bringing environmental benefits. Historically the sector has displayed steady growth through to 2004, from €2.3 billion in 1999.The forecast is for growth, with average annual growth of 2.7% leading to a value of €3.1 billion in 2009. 19.3 EUROPEAN MARKET Within Europe, with the industry valued at €1.3 billion in 2004, the UK dominates, with the industry employing 2,500 people and extracted 22 million tonnes in 2003. Period growth is forecast from total value 1999–2003 of almost €6 billion to almost €7 billion during 2005–2009.
MARINE INDUSTRIES GLOBAL MARKET ANALYSIS 107 20 Shipbuilding 1999–03 2004 2005–09 Irish Market €M 2 0 2 UK Market €M 1,001 234 928 Europe Market €M 63,913 13,143 52,076 World Market €M 183,440 37,746 155,017 Definition – total capital value of ships =>100GRT. Excludes naval vessels. 20.1 INTRODUCTION The world shipbuilding industry is currently enjoying a strong upturn due to the major growth in demand for shipping discussed earlier.World economic growth is buoyant and it is expected to remain so in the medium term boosted by the very strong growth of the Chinese economy and, to a lesser extent, that of other developing economies.World seaborne trade has increased with exports of containerised goods and imports of commodities such as oil & steel.The commercial shipping industry has become more profitable than at any time during the previous decade and ship-owner confidence has grown.The overall result has been a surge of orders for vessels and yards currently have full order books, newbuild tanker prices are up by 40% and average delivery time extended from two to three years. 69 It is unlikely that such high economic growth rates can be sustained and in 2007–8 we expect a return to more normal activity levels as the new tonnage is absorbed by the market. As a result, many shipyards are not adding further capacity. Shipbuilders’ profits have been hit by a combination of a large rise in steel prices and a fall in the US$. A result is that South Korean yards are reported to be targeting fewer orders in 2005. 70 For over a decade the prices of newbuilds has been on a downward trend.The 1990-based US$ index had fallen by 50%, mainly due to chronic overcapacity resulting from government subsidies, often attacked by the EU to little effect. 71 A resumption of the lower long-term growth trend is, however, likely in the foreseeable future. From some $35 billion in 2000, we expect the total value of shipbuilding output to peak at around $45 billion in 2004–2006, and then fall to $39bn in 2008 before returning to its underlying long-term growth trend. However, as shown in an earlier chart, the recent major variations in the euro/dollar exchange masks this dollar market rise. The industry has, over the longer term, produced an average of some 1,800 vessels per annum. Notable changes in the market have included a trend towards larger vessels, especially container vessels and tankers.We believe that this will continue but will not appreciably affect the average size of new vessels constructed during our forecast period. There has been a growth in average vessel size and we may well see 10,000+ TEU container vessels before 2008 but their numbers will be small. 69 ‘Lloyd’s List’ Annual Review 30 December 04. 70 ‘Lloyd’s List’ 5 January 2005, p1. 71 ‘Report from the Commission to the Council on the Situation in World Shipbuilding’, Commission of the European Communities, 2003.http://europa.eu.int/comm/enterprise/maritime/
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Marine Industries Global Market Analysis - Marine Institute

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