Impact & Recovery in the Ship Building and Repairing Industry
The global ship building and repairing market reached a value of nearly $191,913.3 million in 2019, having increased at a CAGR of 0.9% since 2015. The market is expected to decrease from $191,913.3 million in 2019 to $177,809.0 million in 2020 at a rate of -0.01%. The decline is mainly due to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 3.06% from 2021 and reach $191,891.1 million in 2023.
Growth in the historic period resulted from the rising population, increasing demand for cruise ships, and economic growth in emerging markets. Factors that negatively affected growth in the historic period were cheaper air cargo services, long turnaround time, volatile raw material prices, and geopolitical tensions.
Going forward, growing demand for e-commerce and technological advances will drive the market for ship building and repairing. Factors that could hinder the growth of the ship building and repairing market in the future include government regulations, reductions in free trade, global recession, and COVID-19 outbreak.
The ship building and repairing market is segmented by type of service into ship building; and ship repairing. The ship building market was the largest segment of the ship building and repairing market segmented by service, accounting for 83.1% of the total in 2019. Going forward, the ship repairing segment is expected to be the fastest-growing segment in the ship building and repairing market, at a CAGR of 0.2% during 2019-2023.
The coronavirus outbreak has negatively impacted the global ship building and repairing market. The rapid spread of the coronavirus is causing economic and industrial disruptions globally. With government-regulated lockdown and travel restrictions imposed in many countries, the ship building and repairing industry has suffered setbacks due to work and supply chain disruptions, logistical challenges, new contracts ceased, and closure of manufacturing facilities. This setback has also been caused due to the standstill of all kinds of cargos via water or air during the quarantine period, as there is a possibility that the transportation of such cargos in ships or through the air could be carrying the virus from one port to another. Ports from all over the world had to temporarily shut down and stop all activity. Some ports are running at a low capacity, and the storage facilities have been highly overcrowded. Shipbuilding is an industry dependent on the employment of significant numbers of workers and the supply of materials required for construction, both of which have also been severely impacted by COVID-19.
The top opportunities in the ship building and repairing market segmented by service will arise in the ship repairing market segment, which will gain $202.0 million of global annual sales by 2023. The top opportunities in the ship building and repairing market segmented by vessel will arise in the tankers segment, which will gain $1,295.4 million of global annual sales by 2023. The top opportunities in the ship building and repairing market segmented by end-use will arise in the goods transportation segment, which will gain $748.1 million of global annual sales by 2023. The ship building and repairing market size will gain the most in China at $2,621.78 million.
IMS