Industry Analysis & Industry Trends
Industry revenue is estimated to decline 3.8% per annum over the five years through 2012 to reach $88.6 billion. Early in the period, operators benefited from the sustained world growth. The rapid revenue increases mostly came from the shipbuilding segment as shipping companies built capacity to meet large sea transport demand. When the world economy soured in 2008, new ship orders collapsed, leaving shipbuilders working on pre-existing orders. A slump in charter and freight rates and shrinking growth volumes on major trade lanes were factors behind this fall. The lack of new projects will hit operators in 2012 as revenue declines by an estimated 12%. This will occur as existing projects are completed, but few new orders begin construction... read more
Starting a New Business
Many shipbuilding companies amongst developing nations such as China are supported by their respective governments. For example, all Chinese shipyards in China are state-owned. In addition, most of the major shipyards around the world are established to achieve a national agenda such as the establishment of a manufacturing base. It is therefore difficult for start-ups to compete in the shipbuilding segment.
Within the industry, firms have high capital costs. As a result, companies wishing to enter shipbuilding incur high capital investment costs associated with the acquisition of land and property, particularly water front properties. A significant barrier to entry is brand names. Some firms enjoy a high degree of recognition in their respective markets... read more