The German Shipbuilding and Ocean Industries Association which represents the interests of German shipyards, marine equipment suppliers and ocean industries, presented a gloomy picture of the current situation in the sector at its members’ meeting this year.
In statistical terms, the situation for the German shipbuilding industry is still good for 2008. It said that sector sales of all shipbuilding companies, including yards building oceangoing, inland and naval vessels and engaging in repairs and conversions as well as boat and yacht builders surged by about 41% to approx. EUR 7.2 billion as compared with 2007 and marine equipment suppliers also reported growth in sales which reached approx. EUR 13 billion.
However, these statistics no longer reflect the current position. The fact is that the market environment has fundamentally changed in the last six months with a serious downturn in the entire maritime sector that has been faster and more dramatic than expected in the wake of the global financial and economic crisis. Global transport volume and charter rates have fallen since the beginning of the financial crisis, with worldwide demand for ships also plummeting by approx. 90% between October 2008 and March 2009. Moreover, because of banks’ restrictive lending policy, shipyards and companies placing orders have had considerable difficulties obtaining the requisite finance for a shipbuilding contract.
German shipyards building oceangoing vessels delivered a total of 84 ships with approx 1.3 million CGT worth close on EUR 4.4 billion in 2008, thus achieving their best result for the year since Germany’s reunification. In the same period, they booked new orders for 46 units totaling 0.6 million CGT worth EUR 2.9 billion. Related to the whole of the past year, incoming orders thus declined to their lowest level since 2001 and construction volume corresponded to only about half of annual production.
As a result of the declining order trend and numerous cancellations, orders on hand fell to 172 units totaling 3.1 million CGT worth EUR 13.3 billion up to December 31st 2008. There were 19 cancellations valued at approximately EUR 940 million in the first quarter of 2009. No new orders could be booked in the same period. An overall 16 units totaling 275,000 CGT worth EUR 900 million were delivered. Orders on hand thus continued to decline, falling to 139 units with 2.5 million CGT worth EUR 11.5 billion.
Naval shipyards achieved stable sales in 2008. As demand from the German Navy alone does not suffice to utilize fully the available capacities of naval shipyards, these remain heavily dependent on export business.
(Sourced from VSM)
