Global Military Shipbuilding and Submarines Industry Market Research Report from IBISWorld has Been Updated

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Revenue is projected to continue growing in the next five years through stable growth in defense budgets and a focus on advanced electronics and information systems capabilities. For these reasons, industry research firm IBISWorld has updated a report on the Global Military Shipbuilding and Submarines industry to its growing report collection.

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Stable growth in defense budgets and technological advancements will boost industry revenue

Despite the massive effect of the global recession on builders of commercial aircraft and ships, companies primarily involved in the building of their military equivalents fared considerably better. The national security considerations of governments and long-term planning undertaken for military expenditure have ensured that revenue for the Global Military Shipbuilding and Submarines industry has been relatively stable. IBISWorld expects that industry revenue will increase at an annualized 1.2% in the five years through 2012 to reach $38.9 billion. “This growth is primarily attributed to the demand for military ships and boats to protect coastal waters and to expand and renew navy fleet sizes,” says IBISWorld industry analyst Antonio Danova. “The contributions to industry revenue are particularly strong from North America, Europe and North Asia.” Government military budget cuts are forecast to lead to slower revenue growth of 0.3% in 2012.

Profit margins have been relatively stable over the past five years, stemming from the contractual and long-term nature of ship builds. Nonetheless, profit margins declined slightly in the aftermath of the global downturn. Customer countries burdened with high levels of government debt started cutting defense spending, which put pressure on industry margins. “The Global Military Shipbuilding and Submarines industry was able to reclaim previous profitability levels through capacity cuts,” adds Danova. “Profit margins are expected to remain stable over the next five years due to the stability of military demand and naval spending.” The industry has a medium level of market share concentration; the primary reasons for this concentration are the relatively high barriers to entry and a few buyers dominating the market. For example, the dominant buyer, the US Department of Defense, accounts for about half of worldwide naval product purchases. Other large markets include Europe, the Middle East and Asia. In addition, the costs associated with manufacturing military ships, boats and components are very high. Therefore, customers usually award contracts to existing players with proven experience, such as major companies General Dynamics Corporation, Huntington Ingalls Industries, Direction des Construction Navales and Thales Group. Concentration is expected to remain at this level as significant research and development is required to develop new products and innovation in the defense area.

Revenue is projected to continue growing in the five years through 2017. The increase in revenue will stem from stable growth in defense budgets, particularly in the United States, and a focus on advanced electronics and information systems capabilities. An increase in naval manufacturing in emerging countries is also anticipated. For more information, visit IBISWorld’s Global Military Shipbuilding and Submarines industry report page.

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IBISWorld industry Report Key Topics

Firms in this industry operate shipyards or boatyards. Shipyards are fixed facilities with dry docks and fabrication equipment capable of building a naval ship. These establishments manufacture frigates, destroyers, cruisers, amphibious transport ships, aircraft carriers, patrol ships and submarines. They also provide naval ship repair and conversion activities. Boat manufacturers build boats, cabin cruisers, dinghies, jet boats, patrol boats and rowboats for navies and coast guards.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on nearly every US and Global industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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