Economic crisis reaches German shipbuilding

The German Shipbuilding and Ocean Industries Association (VSM), which represents the interests of German shipyards, marine equipment suppliers and ocean industries, presented a gloomy picture of the current situation in the sector at its members’ meeting this year.

In statistical terms, the situation for the German shipbuilding industry is still good for 2008. Sector sales of all shipbuilding companies, including yards building oceangoing, inland and naval vessels and engaging in repairs and conversions as well as boat and yacht builders surged by about 41% to approx. €7.2 billion compared with 2007, and marine equipment suppliers also reported growth in sales, which reached approx. €13 billion. However, these statistics no longer reflect the current position. The fact is that the market environment has fundamentally changed in the last six months with a serious downturn in the entire maritime sector that has been faster and more dramatic than expected in the wake of the global financial and economic crisis. Global transport volume and charter rates have fallen since the beginning of the financial crisis, with worldwide demand for ships also plummeting by approx. 90% between October 2008 and March 2009. Moreover, because of banks’ restrictive lending policy, shipyards and companies placing orders have had considerable difficulties obtaining the requisite finance for a shipbuilding contract.

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