Steady growth as military contracts support revenue
London, United Kingdom (PRWEB) December 20, 2012
The Shipbuilding industry predominantly builds warships with this segment of the industry accounting for 68% of industry revenue. According to IBISWorld industry analyst Lewis Sutton, “new contracts from the Royal Navy have provided a boost to industry revenue over the past five years”. IBISWorld estimates that industry revenue will grow at a compound annual rate of 2.9% over the five years through 2012-13. The industry is expected to continue growing, with revenue rising by 1.0% in 2012-13 to reach £3.15 billion.
Import competition is a key feature of this industry. Although imports account for a relatively low 8.8% of domestic demand, the value of imports has remained strong over the past five years. Import competition comes from countries with low wage and production costs, such as China, South Korea and Japan. Cruise ships account for a large share of industry imports.
Sutton adds, “industry revenue is forecast to grow over the next five years, despite defence spending cuts resulting from the 2010” Strategic Defence Review. Major projects that commenced during the past five years are expected to continue until completion. These projects include building new Type 45 destroyers and two aircraft carriers for the Royal Navy. Long-term trends in tourism and international trade will also influence demand. IBISWorld estimates industry revenue will grow at a slightly lesser rate over the next five years to 2017-18 than it did in the five years to 2012-13.
The Shipbuilding industry has a very high market share concentration. The largest four firms in the industry hold a combined market share of approximately 83%. In truth, it is two firms that dominate this industry, BAE Systems and Babcock International Group. These two firms form what is effectively a duopoly, controlling 78.8% of the market between them.
For more information on the Shipbuilding industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry build ships and construct floating structures. The industry does not include repair activities, but does include ship rebuilding and overhauls. The industry does not build ships used for sport or recreation. The industry also does not manufacture parts of vessels, other than major hull assemblies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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