Wednesday, June 29, 2011
Shipyards remain in slowdown
While businesses around the world are bouncing back from the global recession, shipyards are still in the middle of its effects.
Orders have plunged, prompting shipbuilders to slash payrolls and shift toward building drilling rigs and other offshore products for the energy industry.
The reason for the recession's lagging effect on shipbuilding is peculiar to the industry.
A decline in world trade and shipping three years ago cut demand for ships. But because big tankers and container vessels take three to four years to build, shipyards kept busy filling orders received before the financial crisis.
Orders for ships sank in 2009 and recovery has been slow, although analysts expect orders to increase later this year.
The downturn is affecting shipyards worldwide. China's shipbuilding association last month said some of the country's yards would suspend production after completing existing orders.
With the global economy still fragile and financing prospects uncertain, it will be several years until orders are back to normal, people in the industry say.
Published : June 28, 2011