Marine Industries Global Market Analysis - Marine Institute

110 MARINE INDUSTRIES GLOBAL MARKET ANALYSIS
Shipbuilding, like shipping, is a highly cyclical industry. At the time of its sixth report
on the situation in world shipbuilding in late 2002, the European Commission had
noted the impact of past over-ordering following a period of almost continuous
growth from 1995 to 2000.The uncertainties in the world economy following the
events of 11 September 2001 resulted in a fall in confidence and a major reduction in
orders – 60% down in mid 2002 at 3 million CGT, compared with a quarterly peak
of the 7.5 million CGT in mid 2000.
In the EU the situation was even worse with a decline of 80% in new orders. 9/11
also resulted in a major fall in orders for cruise ships, a European specialist sector.
Between 2000 and 2002 the EU share of the world shipbuilding market fell from
19% to 7% and the Chinese share grew from 7% to 13%.
In 2002 the EU authorised direct aid of 6% to shipyards as a Temporary
Defensive Mechanism.
Although Ireland does not have a significant shipbuilding capability, it is necessary
to understand the shipbuilding sector as it is a driver for others such as marine
equipment, education & training, R&D, etc.
20.4 TECHNOLOGICAL CHALLENGES
Fuel price increases have resulted in growing pressures to reduce vessel operating costs
and the major challenge is to radically improve propulsion efficiency. Engine emission
reduction is also a significant challenge.
20.5 THE LONG-TERM – 2010 ONWARDS
The long-term is fundamentally a function of the growth in world seaborne trade,
the underlying driver of shipping demand, which fuels owner confidence and results
in more shipping orders.
In recent years there has been an increase in the size of vessels but this may reach
its practical limit as a function of ports’ capacity.
Of increasing significance could be the growing desire in Europe, and to a lesser
extent the US, to transfer road freight to short-sea shipping and this could result in
an increase in orders for smaller vessels.