ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)443
Vol.1980/0155

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)443 final
( .
Brussels.11thSeptember 1980
REPORT ONTHESTATEOFTHE
SHIPBUILDING INDUSTRY INTHECOMMUNITY
(SITUATION ASAS1JANUARY 1980)
COM(80)443final

REPORT ONTHE STATE OFTHE SHIPBUILDING INDUSTRY
INTHE COMMUNITY
(Situation asas1January 1980 )
Summary
#
' - /
This report isthesecond inaseries ofreports that theCommission is
topresent totheCouncil atregular intervals .Itanalyses the latest
statistics onthe shipbuilding industry ,thereby showing what point has
been reached inthecrisis confronting the industry and what remedial
action has been taken .
With industrial activity and the resulting trade flows fairly buoyant ,
shipping showed signs ofarecovery in1979 .This generated demand incertain
segments ofthemarket together with adecline inproductivity inthe
operation ofvessels duenotably tohigher bunker costs ,which triggered
something ofarevival inneworders placed with shipyards (+32%world­
wide and +27% intheCommunity ).
Atthe same time ,however ,vessel completions -both intheworld atlarge
andwithin theCommunity -continues their downward trend ,falling by
15% in1979 .This took theoverall fall since 1976 to42% intheCommunity
and to37% world-wide . :.
The increase inorders isfar from strong enough toengender arecovery
ofshipbuilding activity in1980-81 .Since the level oforders only
just matched the level ofcompletions ,order-books have remained very
short andshipyards are still faced with theproblems ofincom­
plete order books .
The level ofemployment declined inline with the fall incompletions ,
with 22.000 jobs being shed innon-military newbuilding inthe Commu­
nity in1979 ,bringing thenumber ofworkers who had lost their jobs
since the onset ofthe crisis tomore than 70.000 . -
TheCommunity byand large held ontoitsshare ofthemarket in1979 ,
but,todoso,had ingeneral tomake greater efforts andmore sub- '
stantial financial sacrifices than itsmain competitors ,since its
industry ,assisted bythepublic authorities ,suffered adecline in
itscompetitiveness ontheshipbuilding market ,dueinparticular to'
monetary factors . ,'

-II-
Thetrendswhichbecamediscernible in1979seemtobeveryprecarious.
Foronething,itishighlyuncertainwhethertheeconomically unorthodox
fleet-operation conditionswillpersist,and,foranother,thereis
everylikelihoodthatconditionsinshippingandshipbuilding willbe
affectedbythedeterioration inthegeneraleconomicclimate.These
factorssuggestthat,inspiteoftheincipientimprovement in1979,
theshipbuilding industrywillstill,in1980and1981,havetocontend
withtherepercussions ofthe.imbalancebetweensupplyanddemandin
mostsegmentsofthemarket:thoseinwhichabalanceisexpected
toberestoredrelatively soonwillbeunabletomakeuptheshort­
fallinactivitywhich,ashadbeenforecastpreviously,seemslikely
tolastuntil1984-1985.
Effortstomaketheshipbuilding industrymorehealthyandcompetitive
aretobeseeninthiscontext,inordertoputtheshipbuilding industry
backontoahealthyandcompetitive footing.Inviewoftheseverityof
anumberofproblems,notablysocialandregional,theCommission
hasputforwardproposalstoenabletheCommunitytohelpalleviate
theconsequences ofthecrisis.

Table ofcontents
page
1. Introduction 1
2. Situation ofthe sector 1
2.1 General survey • 1
2.2 Appraisal ofthe situation
onthe shipping market 2
2.3 Situation intheshipbuilding
industry 6
2.3.1 General survey 6
2.3.2 Completions andneworder intake 7
2.3.3 Order book and workload
situation 13
2.4 Employment 15
3. Market forecasts 17
4. Structural developments 18
5. Conclusions 22

REPORT ONTHE STATE OFTHE SHIPBUILDING INDUSTRY INTHE COMMUNITY -
SITUATION ASAT1JANUARY 1980
1.Introduction
TheCouncil Resolution of19September 1978 (*)onthe reorganiza -
,tion oftheshipbuilding industry made clear that developments inthe
industry need tobeclosely monitored .TheCommission therefore
drew upin1979 afirst report onthe state oftheshipbuilding
industry intheCommunity (**).
Thepresent report updates theexamination conducted inthefirst report
and inthe Commission Communication tothe Council of9December
1977 (***). Itsets out,inparticular ,todescribe thesituation ,which
has shown some conflicting features inrecent months .Shipping demand
intonnage terms haspicked upsomewhat ,helped byless rational
fleet management ,particularly where oiltankers are concerned .This
hasbrought about aslight recovery inneworders placed with ship­
yards .But this situation seems tobefarfrom stable .
V.
Even leaving aside -theeffects ofloweconomic growth expected for
1980 ifnot longer ,various political developments ,notably onthe
energy front ,have imposed ,and will continue toimpose ,constraints ,
thereby introducing agreater element ofuncertainty into any forecast
of short-term market developments .The trends which arehighlighted
inthis report ,and which suggest that the crisis inthe industry is
notover ,reflect thedevelopments that areexpected totake place
onthebasis ofthemarket mechanisms ,anyunforeseeable external
interferences being disregarded .
Since prospects fordevelopments ;inthis sector are nomore hopeful than
\they were previously ,various measures which ,theCommission envisages are
still relevant .Excluding measures aimed atsupporting ,through the Com­
munity budget ,adjustment andreconversion ofthesector ,-measures
which have notbeen approved -itismainly aquestion ofananti-cyclical
scrap -and-buiIdmeasure forships inorder tostimulate demand without
increasing theavailable fleet (which shows atendancy towards overcapa­
city ),accompanied bycomplementary social measures inthis sector .
2.Situation ofthe sector . . "
2.1 General survey
Thegeneral economic situation wasmore buoyant in1979 than could
have been expected following events ontheoilfront :theCommunity 's
gross domestic product grew by3.3%,private investment rose more
rapidly than atanyother time since 1973 ,andtherate ofcapacity
utilization inindustry generally increased .
(*> 0JNoC229 of27September 1978 .
<**) Supplement 7/79totheBulletin oftheEuropean Communities.'
(***) Supplement 7/77totheBulletin oftheEuropean Communities .

Theoutlook for1980 isless promising .According tothe Commission
departments latest forecasts ,general economic growth will bedown
to1.5% for the Community asawhole and could beeven negative
insome Member States ;forecasts compiled bythe OECD for the OECD area
asawhole indicate acomparable hypothesis .The recession would mainly
occur inthe second half ofthe year .
International trade ,byfarthegreater part ofwhich issea-borne ,
will feel theeffects ofthis situation .After recovering somewhat
in1979 ,thevolume ofsea-borne trade islikely togrow more slowly
in1980 and will probably goonexpanding atabelow-average rate
in1981 ;there isareal chance that thesituation ofshipyards
will deteriorate once again .
The level ofactivity inCommunity shipyards continued itsdownward
trend in1979 .None the less ,total completions again exceeded neworders ,
suggesting that thecontraction will continue .This isbound to
accentuate thealready quite severe social problems insbme ofthe
regions affected . ,
Themain factors determining the situation ofshipyards and of
theshipping market onwhich shipyards depend aredescribed below .
.2.Appraisal ofthe situation onthe shipping market
Under the impact ofthe growth inindustrial production inthe OECD
-countries ,world-wide shipping ,measured intonnage terms ,expanded
by5%in1979 .Expressed inton-miles ,however ,the increase was
only 3.5% ,owing toareduction inaverage distances covered .
None the less ,demand intonnage terms rose ,bringing about animprovement
inthesituation onthefreight market ,where rates picked upsignificantly
throughout 1979 and,formost categories ofvessels ,more than com­
pensated forthetwo-fold increase inbunker costs during theyear .
This upward trend washelped bythevirtual stagnation inthe size ofthe
world fleet ,which increased byonly 4million dwt in1979 asdeliveries
fell much more sharply than scrappings and losses .

-3-
Thetablebelowillustrates theincrease intotaltonnage carried and .
thelimited expansion intheworldfleet ■
Worldseaborne tradeandcargo­•carrying fleet
Oilandoilproducts fleet*)
carried bysea
'000million ton-miles % milliondwt %
1973 10.216 100-234,3 100
1975 9.727 95313,0 134
1977 11.459 112 356,1 152
1978 10.678 .105 352,9 151
1979p 10.945 107 350,2 150
Othercargoes
carried bysea
'000million ton-miles % milliondwt ,%
1973 5..187 100 205,6 100
1975 5.636 109 230,7 112
1977 6.017 116 268,5 131
1978 6.344 122 279,8 136
1979p 6.685 129 286,9 140
*)asatendofyear p=provisional Source:Fearnley &Egers,0slo
Thesignsofarecovery werestronger insomemarketsthaninothers,
andwemustdistinguish herebetweendrycargoandoilshipments .
Asthaabovetableshows,oiltransport inton-miles increased by
onlyaverysmallamountin1979(2.5%)andeventhisimprovement
wasattributable largelytostockpiling .
Thebreakdown ofoiltransport bytypeofvesselshowedsomechange
from1978.Thepolitical unrestintheMiddleEastforcedthein­
dustrialized countries toobtainmoreoftheiroilsupplies fromareas
closertohome(theNorthSea,Alaska,etc.),andmedium-sized tankers
arebestsuitedtosuchjourneys .Theexportpolicypursued bythe
producer countries alsomeantthat,inalargenumberofcases,this
wastheright-sized tankertoemploy.Asaresult,additional demand
wasdirected,aboveall,towards medium-sized tankers.

Thisadditional demand madeamajorcontribution torestoring equilibrium in
thissegmentofthemarketandalsointhemarketforvesselscarrying
refinedproducts .Consequent ly,freightratesforbothtypesofvessel
climbedsharplyin1979,makingtheiroperation profitable onceagain.
InthecaseofVLCC/ULCC,however,ratesingeneraldidnotrisesufficiently ,
tocovercapital charges,although someimprovement wasnoted.Thismarket
wasmarkedbyanunchanged volumeofshipments andbyincreasingly less
efficient operation ofthefleetincommission .Slowsteaming ,
portcongestion andpart-cargoing wereencountered morefrequent­
lyin1979,resulting inwidespread refitting ofvesselslaidup.The
following tablereflects theextentofrefitting ,thebulkofwhich
concerns tankers.
TONNAGE LAIDUP
Numberof^
vessels _'000grt ■000dwt
1978July 765 29.651 55.289
October 737 25.486 47.507
1979January 595- 16.678 30.290
ApriI 526 15.048 22.395
July 417 11.206 20.063
October 353 7.490 12.518
1980January 298 6.204 '10.603
Source :Institut fürSeeverkehrswirtschaft ,Bremen
According tosomeexperts,thesedevelopments accounted forcloseto
60million dwtintheverylargetankerfleet,andpartof.thisrepre­
sentedhiddenovercapacity .Andso,inspiteofthelimitedtonnage
laidup,equilibrium isfarfrombeingrestored onthemarket,since
thisreservetonnage mayrapidlyreappear assurpluscapacity .!
Inthedrycargosector,transport measured inton-miles roseby5.3%
in1979.The.expansion ineconomicactivity pusheduptheindustrialized
countries' demandforrawmaterials .Thedemandforironorerose
sharply,particularly asimporters attempted tobuildupstocksinanti­
cipation ofhigherprices.Theenergysituation alsoprompted renewed
interest incoal,importsofwhichgrewsteadily .Lastly,shipments of
cerealsalsorose,!boostedinparticular byincreased demandfromthe
USSRforwheat..

-5-
However,theeffectsofslowsteaming andportcongestion were
particularly disruptive inthecaseoftransport ofironoreand
cereals,andthisresulted inlessefficient capacityutilization .
Asthedrycargocarrying fleetexpanded onlylittle,thegapbetween
transport supplyanddemandnarrowed,makingforgeneral improvement
infreightratesforallcategories ofbulkcarrier.
Thesituation withregardtolinertraffic doesnotappeartohave
improved much,andshipowners arestillhavingtocontendwiththe
samefinancial andmonetary problems andwiththedifficulties posed
byunfaircompetition andcargoreservation -practices.However,the
particularly
cereals,and
* *
Inspiteofthepositive factors notedontheshipping marketin
1979,thefleetownedbytheMemberStatesoftheCommunity contracted
bycloseon4milliongrtbetween 1978and1979.Itwasslightly
smallerinmid-1979 thanin1975.Ifthiscontraction continued,the
repercussions it,mighthaveonthesecurity ofCommunity supplies and
exports wouldhavetobelookedatclosely.Itisimportant tonotethat
thepicturewillbechanged byGreekaccession totheCommunity on
January 1981,andthesituation willhavetobereexamined inthis
context .
Thefollowing tableillustrates theproblem :
AUmer- World Community % Greece %
chantships *000grtofNine ofworld ■000grtofworld
'000grtfigure figure
1.7.1960 129.769,5 43620,5 33,6 4529 3,5
1.7.1970 227.490,0 57369,4 25,2 10952 4,8
1.7.1975 342162,4 74283,3 21,7 22527 6,6
1.7.1977 393678,4 76392,6 19,4 29817 7,6
1.7.1978 406002,0 76930,1 18,9 33956 8,4
1.7.1979 413021,4 73071,8 17,7 37352 9,0
Commercial trading
typesonly
1.7.1978 379549,9 72411,4 19,1 33289 8,8
1.7.1979 385485,7 68495,3 17,7 36631 9,5

Situation inthe shipbuilding industry
2.3.1 General survey -
The situation inthe shipbuilding industry world-wide continued to
deteriorate in1979 ,with completions 15% down on.1978 .However ,new
orders showed signs ofrecovering ,being 32% upin -cgrt .Order
books have therefore ceased shortening and thedeterioration ex­
'perienced bythe industry for theprevious four years seems tohave
been arrested in1979 . '. ' .
• * - -N-
Thedifferent shipbuilding areas -managed toretain their market
shares ,although thefinancial efforts this required varied a
great deal .Substantial currency fluctuations benefited Japanese
shipyards above all .With the value ofthe yen falling byover
20%against thedollar and with most European currencies making
.gains against thedollar ,the cost differential between the Com­
munity andJapan widened significantly .According tosome experts ,
thedifferential will probably lie inthe range 25-55% atthe
beginning of1980 ,depending onthecountry and type ofvessel
inquestion . :
This currency erosion enabled Japanese shipbuilders toput up
their prices inyen .They were able tocover their higher costs
and tobreak even orindeed make aprofit ,without theprice
increases innational currency entailing the same percentage
increase intheir dollar prices ontheworld market .
Inorder tomaintain their position ,European shipyards were obliged
tocontinue toaccept orders ataloss and,inmany cases ,to
have greater recourse togovernment support . -
Whereas theJapanese shipbuilding industry hascompleted its
capacity-cutting programme ,efforts atadapting capacity in
Europe show afair amount ofvariation according tothe countries
concerned ,making itdifficult toassess their overall impact .

Thetablesbelowgivethetrendofcompletions ,neworderintakeandorder
booksintheMemberStates'shipyards .Theyaretakenfromtwodifferent
sources,theOECDandLloyd'sRegister ofShipping .WheretheMemberStates
areconcerned,theOECDstatistics constitute anofficial sourcebutthey
provide amorelimited rangeofdata,containbreaksinthecoefficients
usedforconversions intocgrt(1)anddonotpermitworld-wide comparisons .
Thefiguresproduced byLloyd's(LRS)arenotinfallible either;giventhey
present awiderrangeofdata,that,overaperiodoftimethefiguresin
cgrtaremorecomparable ,andthecaretakentoreferthereaderto
homogeneous reference ,ithasbeenconsidered preferable tousethissource
forcommentaries ,itbeing,moreover,usedworld-wide bythoseconcerned
withthequestion .Thediscrepancies between thetwosourcesoriginate
mainlyfromdifferent appreciations astothemomentwhenanorderiscon­
sidered asbeingdefinite,andinthecoefficients for-conversion incgrt
in1976and1977.Despitecertaindifferences intimingwhichcanoften
arisefromthis,twosetsofdatashowmajortrendswhichgogenerally in
thesamedirection .Sincethedivergences between thetwosources areonly
temporary ,andthepresentreportisessentially concerned withindicating
themaintrends,thereference ,toonlyonesourceisgenerally notofconsequence .
2.3.2Completions andneworderintake ' ««««1000cgrt
(seenote1for
detaiIson
^,..* icoefficients )1976 1977 1978 1979
LRSOECD j
(AWES(1967
coeff.coeff.)
76)LRS 0ECD
(new (new
coeff.)coeff.)LRS OECD
(new (new
coeff.)coeff.)LRS OECD
(new (new
coeff.)coeff.)
Belgium
Denrtark
France
Germany •
Ireland
Italy
Netherlands
UnitedKingdom139.8141,0
560,6425,0
672,41117,0
1468,0 1630,0
20,3 14,0
353.9314,0
940.0507,0
985.1 824,082,2 66/6
496,0422,4
609,6 685>6
1364,61298,8
21,7 20,8
_462,0386,0
556,4443,8
782,8675,2365,2154,8
362.5378,7
430.6.440,2
1029,1 1059,6
5,0
305,2 283,1
513,9455,0
718,4708,9124,8133,9
351,4 303,9
492.0 473,7
660,7 617,4
18,9 17,0
248,6 232,1*
505.1 405,9
579,0 583,9
Community 5140,1 4972,0 4375,2 3999,2 3529,9 3480,3
' 12980,3 2767,8
<*)Figuresrelatetothemajorshipyards only.
J
(1)cgrt-compensated grossregistered ton,ameasure whichtakesaccountofthe
volumeofworkthatgoesintobuilding avessel,calculated onthebasisof
thegrtandofspecialcoefficients fordifferent vesseltypesandsizes
(grtxcoefficient =cgrt).Newcoefficients forcalculating cgrtwereagreed
uponintheOECDin1977.Thefiguresfor1976arebasedonAWEScoefficients ,
whichwerethebasisforthenewOECDcoefficients (butwerenotfully
comparable ).OntheotherhandtheOECDfiguresfor1976arebasedonOECD
1967coefficients whichdivergemarkedly fromthenewcoefficients forcertain
typesofship.Thisexplains whycertain OECDvaluesarenotatallcomparable
withtheotherseries.

Neworderintake
1000cgrt
I
(seenote1page7
fordetails onthe I
coefficients ) i
,. j1976 1977 1978v 1979.
IRS
(AWES
coeff.
1976)0ECD
(1967
coeff.)LRS
(new
coeff.)OECD
(1967
coeff.)LRS
(new
coeff.)OECD
(new
coeff.)LRS
(new
coeff.)OECD
(new
coeff.)
IBelgium 75/054,0115,2 268,559,440,9270,0203,7j
Denmark .317,1 220,0281,0 208,1L263,8306,6391,0 ■418,9
France 63,637,061,672,6214,1 175,6487,3350,8
Germany 726,1511,0707,7666,6535,8448,6805,91007,0
Ireland . 19,2 5,0 3/0 15,017,0
Italy 301,5 281,0 148,9 27,5330,0265,6 156,6 56,0*n
Netherlands 626,4 259,0732,4418,3-376,5311,9 240,2 ..279,8
jUnitedKingdom627,6421,0489,3 553,2230,2338,5188,9305,4j
Community 2756,6
l1783,0 2540,9 2214,82012,61887,7 2554,8 2638,6
*)Figuresrelatetothemajorshipyards only.
In1979,completions fellinallMemberStatesexceptIreland andFrance.Inthe
caseofFrance,however,completion ofanULCCwhichaccounted forcloseonone
quarterofcompletions andasubstantial amountoftheworkonwhichhadbeen
carriedoutbeforehand ,influenced thestatistics for1979whichdonotentirely
reflectthereallevelofactivity .1)Insomecountries suchasDenmarkthe1979
fallincompletions ,islessstrongthantheaveragefallfortheCommunity,but
itmustberemembered thatthis^country hadpreviously experienced agreater
declineincompletions thantheotherMemberStates.Inthereverse case,thefall
inproduction inGermany wasclearlystronger in1979.
Intheperiod1976-79,thecountries inwhichcompletions felllesssharplythan
theCommunity average wereFrance,-Belgium andItaly.Itwasinthelattertwo
countries inparticular thatstructures intheshipbuilding industry showedleast
changeoverthatperiod.
1)According totheFrenchauthorities ,production ^established byaveraging
outcompletions ,lay-downs andlaunchings hadprobablyrisenfrom512.000_cgrt
in1978to413.000cgrtin1979.

-9-
Mention shouldherebemadeofaids,whichwerenotunconnected with
thesetrendsintheMemberStates.Generally speaking,thepurposeof
aidsystemsistwo-fold,namelytohelpunderpin acertainlevelof
activity andtofacilitate restructuring .InthememberStateswhichprovide
aidforproduction ,thiswasmoreorlessofacomparable amountexceptin
Germany whereitwasweaker.Aspecialfeatureofthesituation inBelgium
andinDenmarkisthataidarrangements concentrate almostexclusively on
national shipowners butstillprovide aninducement toplaceorderswith
national shipyards .InItaly,noaidschemewasinforcein1979,butthe
effectsofmeasures understudy,forwhichretroactive application isen­
visaged,havetoacertainextentalready beentakenintoaccount.
SomeMemberStateswereprompted in1979tostartproviding aidsorin­
creasetheirlevelcausing someriseinneworders
ordersmostofwhichhadbeenheldbackinanticipation ofsuchamove.The
inflowtriggedinthiswayaccounted forthebulkoftherecovery'in
theorderintakeintheCommunity .Incountries suchasItaly,the
Netherlands andtheUnitedKingdom,thelevelofneworderscontinued
tofall.
Overall,itisworthnotingthat,inspiteoftheimprovement for
Community shipyards ,orderbooksfailed ,tolengthen,withtheresult
thatshipyards' workload problems areaspressing asever.
Thefollowing tableshowsthetrendinthemarketsharesofthemajor
•shipbuilding regions :
Source:Lloyd'sRegister of
Shipping
1976
•000 X
cgrt1977
'000 X
cgrt1978
•000 Z
cgrt1979
•000 X
cgrt
COMPLETIONS
EC-9
RestofAWESC1)
(Western Europe)
Japan
Restoftheworld
ofwhichEastern
bloc5140,1 23,3
3145,7 14,2
(8285,8)(37,5)
8348,0 37,8
5444,4 24,7
2755,4 12,57!
4375.2 -20,6
3278.6 15,5
(7654,1)(36,1)
8358,0 39,5
5169.7-24,4
2471.3 11,73529,9 21,3
2303.1 •13,9
(5832,9)(35,2)
6120,5 37,0
4593.2 27,8
2132.3 12,92980,3 21,2
2127,5 15,1
(5107,9)(36,3)
4975,2 35,3
3994,7 28,4
1392,5 9,9
ITOTAL jI22078,2 100,0|21181,2100,0jI16546,7 100,0
I_ 114077,4100,0|
[NEWORDERINTAKE
2756,6 17,2
1903,0 11,9
(4659,6)(29,1)
7337,5 45,9
3985,3 24,9
1896,9 11,92540,9 18,1
2076,6 .14,8
(4617,3)(32,9)
6245,9 44,5
3177,4 22,6
1207,8 8,62012,6 18,6
1367.8 12,7
(3380,6)(31,3)
4333.9 40,1
3081,8 28,6
1146,8 10,62554.8 18,0
2179.9 15,3
(4734,6)(33,3)
5904.6 41,6
3568.7 25,1
950,0 6,7EC-9
RestofAWES(1)
(Western Europe)
Japan
Restoftheworld
ofwhichEastern
bloc
TOTAL ||15982,4100,OJ14040,7 100,010796,3 100,014208,0 100,0
(1)AWES:Association o*W;stEuropean Shipbuilders .Members fromoutside the
European Community -retheshipbuilders' association ofFinland,Sweden,
Norway,Spainaniortugal. '

-10
Ascanbeseen from this $|ble ,thedecline incompletions andrise in
new orders maae for abalanced situation world-wide in1979 .This
equilibrium suggests that thedecline incompletions will slow down
overall .However ,thesituation isnot the same everywhere .InJapan ,
forexample ,theratio ofneworders tocompletions was114 %in1979 ,
indicating some pick-up inactivity ,whereas itwasonly 84%inthe
Community ,suggesting that thedecline incompletions will continue .If
this trend were tocontinue ortobecome intensified itwould give rise to
new concern within theCommunity .Within theCommunity ,the situation "differs
from one Member State toanother and ismore gloomy inthe countries where
the contraction inthe' volume ofnew orders has continued (see above ).If
neworders donotrecover fapidly ,it'isinthese countries that thethreat
ofredundancies will probably bemost severe .
Theonly change ofanysignificance inthedifferent regions' market
shares asreflected inthe above table isacontinued increase inthe
share ofsome countries classified under "Rest ofthe world ".These
areprimarily newly industrializing countries ,such asBrazil and
South Korea ,where shipbuilding isplaying akey role inthe in­
dustrialization process .While the relative share ofthe traditional
shipbuilding countries remained unchanged ,there was ashift inthe
source and structure ofthis orders . -
\
Analysis ofthebreakdown oforders byflag reveals acompartmentali­
zation ofthe market which is,however ,less marked inEurope than in
Japan and theUnited States ,where vessels ordered bydomestic ship-
owners forown-flag registration areordered almost exclusively from
domestic shipyards .
InEurope ,this tendency hasbeen accentuated inthe last tenyears
bygovernment action which ,inproviding assistance forinvestment
byshipowners ,hasprompted the latter toplace orders with national ,
yards inorder toguarantee them aminimum level ofactivity .

-11-
Thetablebelowillustrates thisdevelopment .
.i
Orders
placedby
Cornmunity
shipowners j
I
i
Orders
received by
Community
shipyards1976 ||1977 1978 j1979
I
TO 1
C-M
oo
•r-
4-1C_
<0OJze'iw
U4)
LU«r-
L.
U-M
o»c
-CD
■MO
OuOI
uL.
LU-M
Ic
CD
OOZoI*
TO Ig^l
i£if!
,TOTO
'ze'IV>l/>
<_>Q>!Qi
HJt- •(–
f.:Ot.
l_+->UJ■«-»
a>c ■ic
-CDCD
-MO.OO;Oo•2o_J<
£|
o !
I^ Ito
<D
•p­
<_>i-
LU4-*
C=jooI
IZwj
: l1 ?
i i
j i
t ■i i
!|</>;IA
–J flj Q,}
TO UJ•«- *r-
C+-» L.UL.
O<D +-»UJV
4)CIC
,JZDCD
'TOTO-MOOO2E©oZu
64%!5%31%
4
!i
i
66%|! >i'i
I3%j31% 83%17%
I ! ! i
} î !
! I73%j5%j22%
i «
i ' ITOTAL: !TOTAL: jTOTAL: !
3027cgrt j2865cgrt |1994cgrtTOTAL:
2028cgrt
|70%
l5%25%75%
i I|
3%22%
»I
74% ;26%
ii
t
!'!
55% :4%41%
1!
T0TAL: jT0TAL:
2756cgrtj2540cgrtTOTAL:
2.012cgrtTOTAL:
2555cgrt
Source:LRS
Theabovefigurestellonlypartofthestory,since,forwantofdetailed
statistics inthisfield,theydo'notincludeordersplacedbyCommunity
shipowners foradditions totheirfleetsthatsailunderflagsofcon­
venience .
Aggregate ordersbyCommunity shipowners havevirtually markedtimefor
thelasttwelvemonths,andthismaywellprolongtherelative decline
-discussed above-irthesizeofMemberStates'fleetsvis-a-visthe
worldfleet.
Whatismore,ordersplacedbyCommunity shipowners withCommunity yards
fell,obliging thelattertostepuptheirexporteffortsinordertofill
theirorderbooks.Franceisthemosttypical example here.Frenchship-
owners,whohad,forthemostpart,completed therenewaloftheirfleets
before1978andwhoareinadifficult financial situation,accounted for
only17%ofordersplacedwithFrenchshipyards .

Oneoftheconsequences ofcompartmentalization ofthemarketis
thatexportorderscon)^mainlyfromEasternbloccountries,developingcountriesandflagofconveniencecountries!.
Tosecurepartofthismarketfortheirindustry,variouscountries
offerconsiderable financialincentives whichmaysometimesSo
againstthelong-terminterestsoftheirshipowners.
Thefollowingtableshowsthetrendofworldordersbymajorvessel
types.Thepercentages showtheproportionof,orderswonbythe
Community. -: .
Trendofnewordersbyvesseltype
1000cgrtOiltankersBulkcarriers CargoshipsNon-cargo
vesselsTOTAL
1977world 790,61.783,2 8.786,5 2.680,4 14.040,9
%EC 3% 4% 21% "22% 18%
1978world1.185,4 534,8 6.878,9 2.197,6 10.796,7
%EC .-5% ''■4% 24% 12% 19%
1979world3.364,8 2.744,9 !6.524,11.574,1'!14.207,9
%EC j
■■i5% 17% 25% 19% 18%
Source:LRS
Thegrowthinordersofalmost4millioncgrtin1979isthereforedueto
oiltankersandbulkcarriersalone,ordersforwhichincreasedbyatotal
of4.38millioncgrtcomparedwith1978.Thefallinordersforthe
othercategoriesisparticularly markedin'thecaseofnon-cargo
vessels.Thisrenewedinterestintankersderivesfromthesituation
intheshippingmarketdescribedabove.Demandconcentrated mainlyon
thosetypesofvesselforwhichsomedegreeofbalancehasbeenre­
vestablished,notablytankersof80000dwt,oilproductcarriers'of
30-40000dwtandbulkcarriersof60000dwtupwards.
However,anticipatory action,whichisfairlycommononthismarketat
theleastsignofeventemporaryimprovement,acceleratedtheorder
process.
.ItshouldalsobenotedthatCommunityshipyardsconsiderably in­
.creasedtheirshareofthebulkcarriermarket.However,thisrise
doesnotappeartoconstitute asignificanttrend.

-13-
Thefollowing tableshowstherespective sharesofthedifferent
categories ofvesselinCommunity andworldorders:
|1979 IOiltankers Bulkcarriers
lCargoshipsj1
Non-cargo ]
vessel |Total
i
ICommunity! ! ii
I i
ii
i
cgrt
%I168.1 466.4 1628.0 292.3 2554.8
6.6% 18.3% 63.7% 11.4% j
i100.0%
World
cgrt
!y(/•
i3364.8 2744.9 6524.1 ]1574.1 14207.9
23.7% 19.3%
i,45.9% 11.1% 100.0% I
Source LRS
Inspiteofaslightfallcompared with1978,cargoshipsstill
accountforthebulkofCommunity orders.Withinthiscategory,sophisti
catedvessels accountfor70%andgasandchemical productcarriers for
10%.Atalmost 50%,cargoshipsandnon-cargo vessels havethehighest
exportratio.
2.3.3.Orderbookandworkload situation
Atworldlevel,orderbooksat31December 1979wereatthesamelevel
asattheendoftheprevious year,theorderintakehavingoffset
deliveries fortheyear.
Thefollowing tableshowsthechangesintheorderbooksituation in
theprincipal shipbuilding regions:
Orderbooks
1000cgrt At31December 77At31December 78At31December 79
LRS 0ECD !LRS 0ECD LRS 0ECD
EC
RestofAWES
AWES !
Japon j
Eastern Bloc
Other
jregions
t7226,2 6496
5316.2 4770
(12542,4)(11266)
7834.5 7059
2982,0
7840.65087,2 4870
3957,2 3834
(9044,4)(8704)
5464.6 4605 i
2121.7
6787,94882,8 4717
3919,7 3932
(8802,6)(8649)*
5841,6 5004
2297,3
6627,0
TOTAL 31199,5 23418,6 23568,5
*)Cestotauxincluent lecarnetdecommandes del'Italiepourlesgrands
chantiers uniquement .

14-
Comparing oneregionwithanother,itshouldbenotedthat,although the
orderbooklevelsofJapanese shipyards aretraditionally lowerthan
thoseoftheAWES,thedifference betweenthetwocontinued tonarrow
in1979.
IntheCommunity ,orderbookswereunchanged fromtheprevious year's
level,butevenifcompletions movetowardsthelevelofnewordersin.
1979-themostprobable hypothesis -therewillbeafurther re­
ductionofsome20Xincompletions in1980.
Asthefollowing tableshows,theorderbooksituation variesaccording
toCommunity country : \
1000cgrt 1RS 0EC0
Completions
1979Total
order
books
at
31/12/79Forc
1980lelive
[1981ryin
|1982+'Completions
.1979Total
order
books
at
31/12/79Ford
1980elive
1981ryin
1982+
Germany
Belgium
Denmark
France
Ireland
Italy
Netherlands
UnitedKing­
dom661
125
351
492
19
249
505
579896
388
704
1004
20
772
385
713509
168
•317
447
3
602
304
488376
148
268 ■
545
17
142
80
22512
72
119
13
27'617
134
304
474
17
232*
406
5841113
316
712
859
17
526*
382
792661
162
290
424
404*
235
533
I
I452
123
338
408
17
122*
118
21731
84
27
29
42
Community 2981 4882 28381801243 2768 4717 2709
I1795213
*)Largeshipyards only
Incountries suchasGermany,Belgium andDenmark,theorderbooksituation
hasimproved markedly;onthebasisofpresent manpower levels,thein-_
dustry'sworkload inthesecountries shouldgenerally A>eassuredforat
least18months.
Aspointedoutabove,thissituation isnotunconnected withtheintro­
ductionoreven.increase ofdirectorindirect government assistance in
thesecountries in1979.OrderbooksinFranceandItalychangedonly
slightly between 1978and1979,buttheworkloadsituation thereremains
broadlycomparable withthatintheabovementioned countries .
IntheNetherlands andtheUnitedKingdom,ontheotherhand,thesitua­
tionagainworsened,withtherateatwhichcompletions arecoveredby
newordersreaching only47Xand33Xrespectively in1979.Dutchship­
yardsarethusintheperilousposition ofhavinganassuredworkload
ofonly9monthsonaverage.

2.4.Employment
1In1979,,thenumbers employed inshipyards onthebuilding ofnon-
military vesselsfellmorerapidlythanexpected (e.i.bysome
22.000oralmost 15%compared withtheprevious year).Thenumber
ofemployees stoodatsoire129 000attheendof1979andhasthus
shownanoverallfallof36%since1975.whenthefigurewas200000.
t
Employment inshipbuilding intheCommunity atendofyear(newbuilding
innon-military sector).
I1975 !!,1978 1979 I
IBelgium- 6138 5140 5100
Denmark 16630 12000 9900(April1980)
France **) 27628 22010 ' 20900
IGermany *) 46800 32400 27369(1979average)
Ireland I869 840 750
Italy 25000 !20000 19000 >
INetherlands ***)22662 j17540 14540(estimate )
|UnitedKingdom*)[■54550 j
i ;[41050 |31200 % |
Total !
J200277 j150980 128759
(Tablecompiled fromvarious sources)
*)military shipbuilding excluded
**)employment inshipyards withmorethan150workers
***)revisedseriesincluding shipyards affected byreorganization .
Although thisreduction isconsiderable ,itshouldbenotedthatcom­
pletions,whichfellbysome42%between 1976and1979,havecontracted
morerapidlythanemployment .
Onthebasisofarepresentative sampleofshipyards,therehasbeen
ageneral downward trendinactualworking hours,thistrendbeing
moremarkedinsomecountries,suchasFranceandGermany,thanin
others.Asimilartrendhasbeennotedinrespectofovertime,both
inthecaseofthemaximum numberofhoursauthorized andofthe
actualnumbers worked.Shiftwork(particularly onathree-shift
basis)isbecoming increasingly lesswidespread .Thistrendtowards
areduction inworking hoursshouldenable acertainlevelofem­
ployment tobemaintained .However,thereductions inemployment
whichhavealready takenplacearesubstantial insomeregions
andtherateatwhichfurtherreductions takeplaceshoulddepend,
amongstotherthings,onre-employment opportunities intheregions
concerned .Despitethis,theproblemofover-employment doesnot
appeartohavebeenresolved inallcases.

-16-
Sufficiently detailed dataarenotavailable concerning thewaysin
whichthe22000jobswereeliminated in1979.Therearecertain
indications thatthetransfer ofworkerstoconnected activities ,
suchasmilitaryshipbuilding ,withinthesameundertaking has
absorbed anappreciable proportion ofthosemaderedundant while
itwouldseemthataswitchtonon-naval activities cannotbeeasily -
or-readilyaccomplished .
Itshouldbenotedthatthefiguresintheabovetableshowtheem­
ployment balancewithintheindustry andthatthenumberofjoblosses
mayinfactbehigher,inasmuch astherehasbeenrecruitment ofnew
workers.Whilereductions inemployment donotappeartohavesolved
theproblemofover-employment inallcases,itshouldnevertheless
alsobenotedthatsomeshipyards arestillreporting difficulties in
recruiting skilledlabour.;
TheEuropean SocialFundhasreceived applications forcontributions
towardsassistance to •f-redeployment andvocational andgeo­
graphical mobility ofsurpluslabour,andtheCommission isgiving
sympathetic consideration totheseapplications .
Giventheprospect ofaverylowrateofeconomic growthandthe
disparity betweencompetitive positions ontheworldmarket,itis
possible thatthevolumeofnewordersreceived bytheCommunity
industrywillcontinue,atleastin1980and1981,ataverylowlevel
ofsome2to2.5millioncgrt.Thiswillaffectthelevelofcom­
pletions andpossibly threaten thejobsofsome30000personsinthe
.non-military shipbuilding industry .TheCommission endeavours to
propose,.alongwithmeasures designed toIncrease thelevelofdemand
andtopromoterestructuring andconversion ,specific socialmeasures
designed tohelpavoidintolerable socialconsequences .
InthisconexttheCommission hasjustproposed thecreation ofa
newaidfromtheEuropean SocialFundtomaintain atareasonable
leveltheincomesofolderworkers aged55ormorewholeavethe'
shipbuilding sectorinconnection withrestructuring measures .

Marketforecasts
Theimpactonthemedium-term marketprospectsof-thespecialfactors
whichinfluenced demandfortonnagein1979,andinparticularthose
relatingtofleetproductivity,hasnotyetbeenthesubjectofover­
allforewardanalysesbyexperts.Giventhegrowinguncertainty on
themarket,suchananalysisisverydifficulttomakeatthemoment.
Consequently,wecandonomoreatthisstagethanpinpointthe
mainqualitative factorsonwhichitmaybepossibletobasean
assessment offuturetrends.
Inthecaseofoiltankers,thesupplypictureismarked,forthe
reasonsgivenabove,byaconsiderable reserveoftonnage.Although
thisreserveisnotconspicuous,itcan,ifrequired,beconverted ^
immediately intoactualtransportcapacity.Ifweaddtothisthe
likelystagnationorevendeclineinoilimportsandthedisappea­
ranceoftheneedscreated,bytherushtostockpileoilin1979,it
seemsprobablethatnewtonnagerequirements willagainbeveryli­
mited,particularly inthecaseoflargeandverylargevessels.
Furthermore,thoseconcernedfeelthatbalancebetweensupply
anddemandwillnotberestoreduntil1983-84attheearliest,
whiletheygive1985asthemostlikelydate. '
Inthecaseofdrycargovessels,therateofgrowthofdemandin1980
isunlikelytomatchthatin1979.Avirtuallygeneraleconomicreces­
sionisanticipated in1980whichisboundtocauseadeclineintrade
leadinginturntoafall-offinshippingrequirements (+2.3%in
1980comparedwith5.3%;in1979).However,marketssuchasthe.
transportation offoodstuffs (particularly cereals)andcoal,which
dependlessonswingsinthebusinesscylce,maywellcontinueto
growatthesamerateasin1979(byapproximately 6%).
Asregardsgeneraleconomictrendsbeyond1980,estimatesarediffi­
culttomakesincetheydependparticularly onsuchimponderables as.
thetrendinoilprices,adaptations tothistrendandinflation.
ItisfeltthatGNPislikelytoincreaseinindustrialized
countriesby2.5%perannum,i.e.lessrapidlythanduringthe
1975-80period(whenitgrewatanannualaverageof3.3%).Itis
thoughtthatin1981,whichwillstillbeaffectedpartlybythe
poorsituationin1980,thefigurewillbeevenlowerthanthis
average.Theslowdownindemandforvesselswhichwilltakeplace
in1980and1981probablymakeitimpossibletouseintheseyears
alltheavailablecapacity,whichwillthereforehavetobeab­
sorbedsubsequently .Thisisboundtodepressthelevelofneworders '
until1981atleast,exceptperhapsincertainfairlylimitedsegments
ofthemarket.

Underthesecircumstances ,theCommission ,incommonwithmostofthe
circles concerned,feelsthattheforecasts available uptonowarestillvalid.Thefollowing tablerepeatsthemainresultsofthese
forecasts assetoutinthefirstreportonthestateoftheshipbuil­
dingindustry intheCommunity .
Typeofvessel |Contracting requirements 1978to1985
;;(inmilliongrt)(inmillioncgrt)
Oiltankers >10000dwti
i.20,0n 9,3
<10000dwt 1,4 ! 3,4- -
Bulkcarriers _ : 13,0 i 6,0'
General cargoships u 29,2 34,7
Gascarriers -■- 7,5 • 5,2
Miscellaneous!i
Si!9,9 j
. i27,1
TotaI
Annualaverage
(January 1978tomid-1984 =
6.5years)lì
i!
|i81,0 _
112,5
>85,7
13,2
Takingaccountofthesefactors,■rj
in1979doesnotyetmeanthatthe
arecovery phaseandshouldtheref <
-continuing thenecessary reorganiz ;
CouncilResolution of19September
4)Structural developments
InalltheMemberStates,continuec
shipbuilding tomarketconditions c
unquestionable progress hasbeenm<
Themainmeasures takeninclude rec
working hours,shipyard closures ar
ineachMemberState,whichvaryg<
described inmoredetailbelow. i
i
Germany
Since1975,Germanshipyards havet]
81existingbuildingdocks,.J
theclosures aretemporary andwhici
measures cannotbeisolated fromth!
earlier,accompanied byconsiderablisprobable thattheslightimprovement
larkethasgenerally andfinallyentered
^einnowayserveasapretextfordis­
:ionofshipyards calledforinthe
978.
efforts havebeenmadetoadapt
dprospects ,withtheresultthat
einreorganizing theindustry ,
ctionsinthelabourforcea,nd
diversification .Thedevelopments
erallyfromonetotheother,are
enforcedtoclosesome20ofthe
utitisdifficult tostatewhichof.
willprovepermanent .However,these
restructuring efforts whichweremade
investment .

-19
Therehavebeensubstantial reductions intheworkfbrce sincethe
crisis.Attheendof1979,totalemployment wasdownby23%com­
paredwith1975andbymorethan40%inthemerchant shipbuilding
sector.Compared with -1978,thereduction inemployment innon-
military newbuilding wasrestricted tosome5000workers thanks
toanincrease inshort-time working whichaffected 10500per­
sonsduringthefirsthalfoftheyear.Theintroduction ofthe
government aidprogramme causedorderbooklevelstorisesomewhat
attheendof1979,andshort-tine working bythemaffected only
2600persons.Nevertheless ,totalhoursworkedwereattheir
lowestlevelsincethecrisis,i.e.lessthan50%ofthe1975figure.
Efforts towardsdiversification havebeenpersued andanumberofyards
havereducedthesharerelating tonewbuilding withtheresultthat,
ofthetotalnumberofhoursworkedinthesector,lessthan50%
havebeendevotedtothisactivity .Theseefforts haveledbothtoan
increase inothernavalactivities (worships,repairs,etc...)anda
noticeable development inactivities outsideshipbuilding whichnow
exceed 10%oftotalhoursworked.
BeJ.2T_um– . ,
Therehavebeennomajorstructural changesinBelgium.
Sincethecrisis,thetrendinordershasledtoreductions inem­
ployment .Theseoccurred primarily in1976,sincewhenthework­
forcehasbeenmaintained atroughlythesamelevel,partlyowing
tothebuilding ofvessels onownaccount andtheintroduction of
short-time working.
Denmark
InDenmark,responsibility fortheindustry'sreorganization
lieswiththeshipyards alone.
Since1975,yardshavehadtorelyincreasingly onordersfromnational
shipowners ,butthesehavenotbeensufficient toavoidareduction
inemployment :morethan6600jobshavehadtogo,althoughthis
hasinvolved theclosureofonlythreesmallyards.
In1978,thegravityofthesituation ledtheDanishGovernment in-particular
tospeeduptheplacingofpublicorders.
Furthermore ,thespecialcreditconditions afforded toDanishshipowners ,
whichhadbeenintroduced atthebeginning of1979,wereextended byayear
andtherefore remainineffectuntiltheendof1980.

-20-
France
Whiletherehavebeenmajorstructural changesinthepastinFrance,
fewchangesoccurred in1979.
Since1976,themajorFrenchshipyards haveembarked onaprogramme of
diversification ,particularly -throughmergerswithcomplementary com­
panies.Furthermore ,amajorshipyard hasevenbrokenthroughthe
traditional division inFrancebetweenshipbuiIdingandshiprepairing .
Duringthesameperiod,thenumberofsmallshipyards hasfallenfrom
tentoseven.'
Thegovernment supportplan,whichsetsanordertargetof435000cgrt
in1980and420000cgrtin1981,containsstructural guidelines .
designed togrouptogether certainshipyards .
During1979,thesituation worsened andthelowleveloforderscompelled ^
theGovernment tograntspecialassistance 'totwomajorshipyards .During
thesameyear,theaveragenumberofhoursworkedperweekfellfrom42to
40andevenreached 34inonelargeshipyard .Withregardtoemployment
therehasbeenareduction of6500jobssince1975.Itisforecast that
therewillbeareduction of2000jobsin1980.
Ire_land
In197.8,theIrishGovernment decidedtograntfinancial assistance for
thereorganization ofitsonlyshipyard capable ofbuilding ocean­
goingvessels,withtheaimofreducingactivity intheshipbuilding sector
whileatthesametimeboosting thatinothersectors.Thetargetforthe
endof1980istoreduceproduction by35%compared withthelevelin
cgrtreachedin1974-76. .'
Italy
Fewstructural changestookplacein1979inItalianshipyards .The
reorganization plandrawnupbytheGovernment isstillbefore
Parliament andanewreorganization planisbeingstudied.Asnoaid
programme hasexistedsinceSeptember 1978,theItalian Government
hasproposed emergency supportforshipyards,mostofwhichhave
cutbacktheiractivities asaresultofthecontraction inorders.
Nominal employment fellbyonly5%in1979,butthesystemoftem­
porarylay-off wasusedonalargescalefortheunoccupied workforce .
Netherlands \"_
In1979,theprogress madeinimplementing thereorganization programme
decided onin1977variedaccording toshipyard groupsandnewmeasures
hadtobedrawnupinsomecases.

-21-
Amongthegroupeofshipyards specializing inthebuilding oflargeand
verylargevessels andinoff-shore work,theaimofmaintaining a
singleyardcapableofbuilding verylargevessels hasencountered sub­
stantialdifficulties andhasnotbeenachieved asplanned.Thus,to
avoiditstotalclosure,thisshipyard hashadtobeseparated fromthe
grouptowhichitbelonged andithasbeenrunsincethebeginning of
1979asaStateconcern.Finaldecisions ontheroleofthisshipyard
werenottaken. Withinthesamegroup,repairactivities have
alsobeenreorganized .
Thegroupeofshipyards specializing inthebuilding oflargeandmedium-
sizedvessels hasmadegoodprogress ,withitsreorganization andthese
yardsarenowforthemostpartgrouped aroundthelargestshipyard,the
modernization ofwhichisfullyunderway.Oneyardinthegrouphasbeen
closed.'
Inthegroupofyardsspecializing inthemanufacture ofdredging
equipment ,thetwolargestunitshavebeenmerged ,;inthesamegroup,
twoyardshavebeenclosed. -
Inthecaseofthegroupofshipyards situated alongthemajorrivers
andthegroupofshipyards inthenorthofthecountryspecializing in
thebuilding ofsmallvessels,noprogress hasbeenmadetowards ,
reorganization .Anumberofestablishments havehadtoclosedown.
Alltheseeventsledin1979toacontraction ofemployment ofsome
3000personsinnewbuilding ,leaving some14500personsstill
employed attheendoftheyear.
United Kmadom ■
Thereorganization programme ofBritishShipbuilders (BS),whichwas
accepted inJune1979bytheUnitedKingdomGovernment ,providesfor
areduction inthemerchant vesselbuilding sectorof33%inproduc­
tioncapacity andof50%intheworkforce compared with1976.By1981,
production shouldthusbedownto430Q00cgrtandemployment to
20000jobs.
Priortothisreorganization programme,threeshipyards hadalready
beenclosedsinceBSwassetup.Theaimofreducing capacityittobe
achieved throughthecessation ofmerchant vesselbuilding insevenother
shipyards inthegroup.
Thereduction intheworkforce isproceeding according toplanand
thenumberofemployees stoodat23500attheendof1979.Thework­
forcetargetfor1980/81,together withacapacity of430000cgrt,
shouldenableproductivity inUnitedKingdomshipyards tobeincreased .

-22-
Asregardsdiveirstf-ioation,themainemphasishasbeenonintensifyingmilitaryshipbuilding,^rrfploynientinthissectorhasconsiderablyin­
creasedsince1975. .
TheBelfastshipyardmustalsoreducejtscapacityanditwillreceive
governmentaidforvesselordersfor.deliveryafterJuly,1981provided
thatproductionandemployment donot.exceedtheceilingslaiddown.
5)Conclusions ' '
Thegeneralshort-termeconomicoutlookdescribedabove,whichisfor
virtuallyzerogrowth,risinginflationandstillhighinterestrates,-
willprobablyhaveanegativeimpactoninternational tradeandthus
onthelevelofnewordersforvessels.TheCommissionthereforefeels
thatthereisnolikelihoodofanupturnintheshipbuilding market
beforetheendof1981.Althoughtherewillbeexceptionsinsome
segmentsofthemarket,thesealone,willnotbesufficienttohavea
noticeable impactontotaldemand.
TheimpactofthissituationontheCommunityshipbuilding industry
willbeparticularly heavyifshipbuilding continuestosuffer,asit
didin1979,disadvantages fromtheappreciation ofMemberStates'
currencies,particularly againsttheyen;asthemainworldproducer,
Japanplaysadecisiveroleinpriceformationonthismarket.It
shouldalsobenotedinthisconnectionthattheproductionrestrictions
inforceinJapanaretoberelaxedforthe1981fiscalyear.
Consequently,theresultantincreaseinactualproductionpotential
(from39'/.to51%onaverageofmaximumproductionlevelsin.the
period1974-75)maywell,inastagnatingmarket,alsoexacerbatethe
difficulties whichEuropeanshipyardswill,havei.nmaintainingtheir
shareofnewworldorders.
ItwasagainstthisbackgroundofmarketprospectsthattheCommission .
transmitted totheCouncilin1979acommunication concerning ananti-
cyclicalschemeintheindustrydesignedtoboostdemandandsoalleviate
thesocialconsequences ofthecrisis.Thisschemeconsistsinpromoting
thescrappingandsimultaneous buildingofocean-going vesselsofhalf
thetonnagetobescrapped.Theideaspresentedwereworkedoutinclose
contactwiththecirclesconcerned/whichgenerallyviewedthem
favourably.FollowingtheCouncil'sdiscussionofthiscommunication at
theendof1979,theCommissionisstudyingthepossibilities ofsub­
mittingconcreteproposalsinthisfield.
OnaproposalfromtheCommissiontheCouncilhasjustagreed,in
connectionwiththefundsavailablefromthenon-quotasectionof
theRegionalFund,-thatthepriorityregionseligibleforthistype
.ofassistanceshouldincludethoseinwhichtheshipbuildingcrisis
hasparticularly severe,consequences .
Onthesocialfront,theCommissionhasjustproposedmeasuresde­
signedtocontributetothemaintenance oftheincomesofolder
workerswholeavethesector.Thesemeasuresshouldenablethe
industrytocontinueitsreorganization underacceptablesocial
-conditions . -