Los Angeles, CA (PRWEB) July 08, 2013
Although most manufacturing industries faced severe declines during the recession, the Ship Building industry was able to weather the storm with only slight dips in revenue. Over the past five years, the industry has benefited from a steady amount of work stemming from government and military clients and the time lag between ordering a ship and its completion. Additionally, “demand grew due to greater demand from ocean and coastal transportation companies, which require ships for operations,” says IBISWorld industry analyst Lauren Setar. In the five years to 2013, IBISWorld estimates that the Ship Building industry's revenue will grow at an average annual rate of 2.8% to $759.6 million, including an increase of 6.3% in 2013.
Due to the time lags in the industry, the industry's revenue declined in 2010 and 2011 rather than 2009 when companies in other industries experienced immediate declines from the recession. “In 2009, the Ship Building industry benefited from contracts ordered before the recession set in,” explains Setar. “But then in 2010 and 2011, operators' backlogs of new ship orders fell in line with slowed demand for commercial transportation as consumers slashed spending during the recession.” This drop in demand pushed revenue down 2.4% and 4.5%, respectively, in those years.
Also in 2010, the Canadian government announced the National Shipbuilding Procurement Strategy, fuelling demand for combat and noncombat shipbuilding projects. This 20- to 30-year plan is set to rebuild the Royal Canadian Navy and the Canadian Coast Guard fleets. According to Public Works and Government Services Canada, the program has started contract discussions and negotiations. IBISWorld estimates that the plan helped push revenue back into growth in 2012 and will especially stimulate the industry over the next five years.
Due to the Procurement Strategy, the entire industry has the opportunity to benefit. Two of the industry's largest companies – Irving Shipbuilding and Seaspan Marine Corporation – are set to build the large vessels, while all shipyards can compete for subcontracts from those operators and for ship repair, refit and maintenance under the program. Finally, the industry will enjoy increased demand for commercial shipbuilding. With higher business investment and confidence in the Canadian economy, demand will grow with new vessel orders. For more information, visit IBISWorld’s Ship Building in Canada industry report page.
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IBISWorld industry Report Key Topics
Companies in the industry build, repair, convert and alter ships in shipyards. Shipyards are fixed facilities with dry docks and fabrication equipment capable of building a ship, defined as water-craft suitable or intended for other than personal or recreational use. This does not include boat-building activities.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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 every US and Canadian 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 http://www.ibisworld.com or call 1-800-330-3772.