Shipbuilding Market Size, Share & Trends Analysis Report By Ship Type (Cargo, Vessel, Container, Tanker, Multi-Purpose Ship, Car and Passenger Ferry, Others), By Process (Designing, Production Planning, Cutting and Processing, Assembling and Launching, Outfitting), By End-User (Commercial, Military), By Propulsion (Conventional Propulsion (Diesel Engines), Gas Turbine Propulsion, Nuclear Propulsion, Electric and Hybrid Propulsion) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global shipbuilding market size was valued at USD 145.43 billion in 2023. It is expected to reach USD 197.03 billion in 2032, growing at a CAGR of 3.43% over the forecast period (2024-32). The expanding tourism industry and increasing popularity of cruise vacations have led to a higher demand for passenger ships and luxury cruise liners, contributing to the growth of the shipbuilding market.

Shipbuilding involves building large sea-going vessels using steel or other materials, including wood and composites. Manufacturing ancillary marine equipment, such as sails, motors, electronics, and other fittings, is a component of shipbuilding and boatbuilding. Construction of ships and other floating boats is known as shipbuilding and is often done in a facility known as a shipyard. Prefabricated pieces are widely used in modern shipbuilding. In shipbuilding, large, multi-deck sections of the hull or superstructure are built, brought to the dock or slipway for assembly, and then lifted into position. In order to reduce the amount of work required to assemble or install parts deep within the hull once it has been welded together, the most modern shipyards pre-install machinery, pipelines, electrical cables, and other components within the blocks.

Moreover, increased government expenditure on naval and defense capabilities drives the demand for military vessels, including warships, submarines, and patrol boats. Government contracts provide significant revenue for shipbuilders.

Market Dynamics

Market Drivers

Increasing Container and Dry Bulk Trade

Trade growth has been one of the hallmarks of the global economy in recent decades, and maritime transport is the backbone of international trade. The market for ships is mainly influenced by naval trade. The expansion of supply chains and the opening of new markets made possible by maritime transport have sparked the economic growth of many countries worldwide. It is estimated that around 90 percent of all freight is transported by sea. As a result, nations that rely significantly on ships drive up the market for shipbuilding.

About 85% of the shipbuilding activity was concentrated in China, Japan, and South Korea. The most popular marine vessels utilized for trading activity are cargo ships. The need for maritime transportation has grown over time, which has led to a growth in the volume of imports and exports globally. With globalization firmly established at the core of many economies, opportunities for international trade of goods are expanding, offering a superior selection of commodities at various price points. The increasing sea trade between countries will likely drive the shipbuilding demand over the forecasted period.

Market Restraint

Lack of Resources and Workforce

The workforce's consistency has a significant impact on the rise and fall of the shipbuilding sector. In addition, the lack of resources has recently caused the shipbuilding industry to suffer due to the industry's lack of new hires and the aging of the labor force. The youth workforce is predominately choosing white-collar careers as their careers of choice, creating a labor shortage. According to a recent interview with the general manager of the BAE Systems Ship Repair yard in Florida, the majority of the professional managers and workers are retiring, and the average age of BAE Systems Ship Repair yard employees is 55. Variations in the yard's workflow also impede the expansion of the shipbuilding industry. In another interview, the president of the Virginia Ship Repair Association remarked that the enormous workplace strain on the employees makes it difficult for them to retain and hire new employees, which affects the business.

Market Opportunities

Increasing Trade Activities Between Countries

More than four-fifths of all global merchandise commerce is conducted via the maritime route, making marine transport the foundation of globalized trade and the manufacturing supply chain. Trade volume has expanded with a growth rate of over 10% during the previous ten years. The rise in consumer demand in emerging countries can explain the substantially more significant growth in import volume. There has been an increase in maritime transportation demand over the years, which has increased global import and export activity. With globalization firmly established at the core of many economies, opportunities for international trade of goods are expanding, offering a superior selection of commodities at various price points. 75% of European commodities come by sea from external partners, making shipping the most economical method of moving goods from source to buyer.

Regional Analysis

The global shipbuilding market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific's shipbuilding market share is expected to grow at a CAGR of 4.93% during the forecast period. India has roughly 28 shipyards spread across several states, and its 12 largest ports handle about 61% of the nation's total cargo volume. Furthermore, in the military, nearly 70% of the capital budget has been spent on domestic goods during the past five years, with more than 60% of the naval budget allocated to capital expenditures. The country's leading naval vessel makers, including Cochin Shipyard Ltd. (CSL), Hindustan Shipyard Ltd. (HSL), Mazgaon Dock Shipbuilders Ltd. (MDSL), Alcock Ashdown Ltd. (AAL), and Reliance Navy & Engineering Ltd. (RNEL), have an order book of more than 180 naval vessels.

Additionally, China has a significant proportion of the global market in terms of delivery orders and order books at 43.1%, 48.8%, and 44.7%, respectively, according to China's Ministry of Industry and Information Technology (MIIT). China is swiftly retiring older, single-mission warships in favor of larger, multi-mission ships outfitted with cutting-edge anti-ship, anti-air, and anti-submarine capabilities, sensors, and command-and-control networks. China is moving forward with its military modernization plans amid territorial and maritime disputes. These factors are anticipated to drive the shipbuilding market over the forecast period.

Europe is expected to grow at a CAGR of 4.80%, generating USD 3.41 billion during the forecast period. The German government places a significant emphasis on international trade. A strong and globally competitive maritime sector is essential for the economy since it boosts Germany's competitiveness and supports growth and employment. Around 2,800 businesses are engaged in the shipbuilding and ocean sectors, and around nine shipyards assist the German naval shipbuilding industry. It produces an estimated 85% domestic value on deliveries from German shipyards. The United Kingdom prioritizes maritime security, which has become even more important since the country decided to exit the European Union. Nearly 95% of all imports and exports from the UK travel by sea via more than 400 British ports. Rich fishing grounds, vital infrastructure like underwater cables, oil rigs, wind farms, and seven coastal nuclear power plants are all in UK waters.

North America is anticipated to grow steadily over the forecast period. The US shipbuilding sector has been losing ground due to various issues, including intense international competition supported by government subsidies, government cargo decline, and commercial ship orders. In the United States, there are over 120 shipyards engaged in shipbuilding activities, and the government is currently the domestic shipbuilding industry's largest client. Due to a drop in demand and a widening gap between domestic and foreign shipbuilding productivity and cost, US commercial shipbuilding of big merchant-type ships fell. Few of the nation's leading commercial shipyards rely only on the limited domestic market. In addition, the government signed a long-term strategic agreement with two Canadian shipyards, namely Irving Shipbuilding Inc. (Halifax) and Seaspan's Vancouver Shipyards Co. Ltd (Vancouver), for the construction of combat and non-combat naval vessels for the Royal Canadian Navy and non-combat vessels for the Canadian Coast Guard, to support the government's plans to build a large vessel fleet.

Foreign participation in Brazilian shipyards is not prohibited, and the country's shipbuilding sector is open to foreign interests. There are not many restrictions on foreign capital investment in Brazil that are mentioned explicitly in the legislation, like in the case of the fishing business. Brazil offers favorable ship construction agreements in addition to luring international investment, which further aids in accelerating the growth of the domestic shipbuilding sector. Most shipbuilders in the UAE prefer to subcontract some of their work to different Asian shipyards. The nation's shipbuilding sector supports the maritime industry throughout the entire Gulf area by generating jobs for the local population in the maritime technology sector and educating the populace about the nuances of the marine industry.

Segmental Analysis

The global shipbuilding market is segmented by type, propulsion and end-user.

Based on type, the global market is bifurcated into cargo, tankers, vessels, navel, containers, passengers, the other types.

The increase in international trade and global supply chain expansion drives the demand for cargo ships. More cargo must be transported globally, requiring new and more efficient vessels. According to the International Chamber of Shipping, 11 billion tons of goods are transported by ship each year.

The tankers segment in the shipbuilding market includes vessels designed to transport liquid cargoes such as crude oil, refined products, chemicals, and liquefied natural gas (LNG). According to the OECD, global production of petroleum and other liquid fuels will increase by 0.6 million b/d in 2024, boosting the need for tanker vessels.

The increasing popularity of cruising and leisure travel drives demand for new and upgraded cruise ships. The European director of Cruise Lines International Association said there is demand for 300 new European cruises. Hence there is growth of the segment due to the increase in disposable income of people.

Increasing geopolitical tensions and security threats drive nations to invest in and modernize their naval fleets to ensure national security and defense capabilities. For instance, The Indian Navy launched the INS Vikrant, an indigenous aircraft carrier, in 2022, and France's naval forces took delivery of the FS Bretagne, a FREMM-class frigate, in 2022.

The specialized vessel segment in the shipbuilding market includes vessels designed for specific functions beyond standard cargo or passenger transport. This category encompasses a variety of ships such as LNG carriers, offshore support vessels, research vessels, and heavy-lift ships.

Innovations in fishing technology, including advanced sonar systems, automated catch handling, and improved navigation tools, drive the development of new and upgraded fishing vessels. The EU invested 2 million euro

Based on end-user, the global market is bifurcated into transport companies, military, and other end-users.

The increasing volume of global trade is one of the primary drivers for the growth of the commercial shipbuilding market. Shipping companies are continuously looking to modernize their fleets to improve efficiency, reduce operational costs, and enhance cargo capacity. According to the International Chamber of Shipping, 11 billion tons of goods are transported by ship each year.

The primary driver for military shipbuilding is the need to ensure national security and maintain a robust defense posture. Countries invest in naval capabilities to protect their maritime borders, secure shipping lanes, and project power globally. Rising geopolitical tensions and regional conflicts drive the demand for military vessels due to this the growth of this segment is on the path.

By Propulsion, the global market is bifurcated into Conventional Propulsion (Diesel Engines),Gas Turbine Propulsion, Nuclear Propulsion and Electric and Hybrid Propulsion.

Diesel engines are a well-established technology with a mature infrastructure for fuel supply, maintenance, and repair globally. Diesel engines offer a favorable balance of cost and performance hence the owner shifted toward the segment.

Gas turbines provide a high power output relative to their size and weight, making them ideal for applications where space and weight are critical, such as in naval vessels. Compared to traditional diesel engines, gas turbines can offer lower emissions, making them more environmentally friendly. This feature makes the segment more reliable hence there is growth in this segment in the future.

Nuclear propulsion provides ships with virtually unlimited range and endurance, as they do not require frequent refueling like conventional fossil-fuel-powered vessels. There are some examples such as, The Nimitz Class is a class of ten nuclear-powered aircraft carriers in service with the United States Navy.

Stricter international regulations, such as the International Maritime Organization's (IMO) sulfur cap and greenhouse gas reduction targets, are pushing shipbuilders and operators towards cleaner propulsion systems. Electric and hybrid propulsion systems significantly reduce emissions of pollutants such as sulfur oxides (SOx), nitrogen oxides (NOx), and carbon dioxide (CO2), contributing to cleaner air and reduced environmental impact which facilitates the more use of the segment.

Impact of covid-19

COVID Impact: During COVID-19, supply chain interruptions hampered the trade, causing a lack of raw materials for producers and a delay in delivering finished items in the form of blind bolts to customers. As official prohibitions around the world have been lifted, demand for blind bolts has already begun to rebound to pre-pandemic levels.

Recent Developments

• June 2024 - China Merchants Energy Shipping placed an order with New Times Shipbuilding for several newcastlemax bulk carriers. The Hong Kong-based business has contracted the Jiangsu-based shipyard to construct eight conventional marine fuel 210,000-dwt new buildings, which are scheduled for delivery in 2028.
• June 2024 - Damen Shipyards entered into an agreement with Portland Harbour Authority (PHA) in the United Kingdom to deliver Damen ASD Tug 2111, one of its most recent tugs. The 21-meter-long, extremely maneuverable ASD Tug 2111 can draw 50 tons of bollards.