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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
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file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
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der genannten Verordnung freigegeben.  
COMMISSION OF THE EUROPEAN COMMUNITIES
C 0H <84> 550 final  
Brussels, 10 October 1984
R E P O R T  F R O M  T H E  C O M M IS S IO N  T O  T H E  C O U N C IL  
o n  the state of the shipbuilding industry in the C om m unity
(Situation at the beginning of 1984)
C 0M C 84) 550 final

C O N T E N T S
S u m m ary
1. Introduction
2. General economic background
3. Trends in the sea transport sector
4. Situation in the shipbuilding industry
4.1 General trends
4.2 Situation in the Com m unity
4.2.1 Production
4.2.2 N e w  orders
4.2.3 Order books
4.2.4 Em ploym ent
4.3 Prospects
5. Guidelines for action at Com m unity level
Appendi x

-  1 -
S U M M A R Y
This docum ent is the sixth report from the Comm ission to the Council o n  the  
development of the crisis in the shipbuilding industry.
The situation worsened in 1983. World sea transport continued to decline  
from 1981 levels, a  fact which deepened the disturbance arising from the  
over-capacity of fleets.
Contrary to what one might expect as a  result of these negative developments,  
world dem an d  for vessels did not decline further in 1983, having being buoyed  
u p  by speculative orders prompted by a  n e w  fa ll in prices initiated b y  
Japanese and South Korean yards. A s  the latter cornered m ore of this dem an d  
than hitherto, Com m unity shipbuilding suffered an unprecedented drop in its  
market share and found itself in a  position which has probably never been so  
di ffi cult ;
It does not seem  that the shipyards can expect an improvement in the situation  
in the near future :  fleets, already having surplus capacity, can m eet
foreseeable needs, even if these grow, and the drop in n e w  orders for ships  
will m ake itself fe lt o n  the production side. In addition, if Japanese and  
Korean producers, w h o  together satisfy 65 %  of world demand, refuse to accept  
that part of this contraction in dem and should affect them, the situation m a y  
becom e extremely d ifficu lt in areas where the industry is m ost vulnerable, in  
particular in Europe.
In the Com m unity in 1983, the drop of 2 1  %  in n e w  orders accompanied by a  fa ll  
in shipyard employment of 9 % . It is likely that job num bers w ill continue  
to decline in the short term, since work program m es for a  num ber of yards have  
been lacking since autum n 1983 and lay-offs are announced.
This development of the situation w ill require the extension and reinforcement  
of efforts by the Community's industry to adapt to market conditions, mainly  
by directing action towards improving competitiveness and, where appropriate,  
modifying public aid measures in this direction.
R E P O R T  O N  T H E  S T A T E  O F  T H E  SHIPBUILDING IN D U S TR Y  IN T H E  C O M M U N IT Y  
Situation at the beginning of 1984  
1. Introduction
The Council Resolution of 19 September 1978 called o n  the Com m ission to  
submit periodic reports o n  the state of the shipbuilding industry. This is  
the Commission's sixth such report. Like the previous ones, it seeks to  
outline the current situation in, and the prospects for, the shipbuilding  
market.
In 1983, the market conditions for shipbuilding were not favourable :  the
falling-off in maritime traffic  continued, as did the disturbance of the  
market resulting from the fleet over-capacity. In the world's two m ain
O J  C  229 of 27 September 1978.
Suppelement 7/79 to the Bulletin of the European Communities ;
C0MC80)443 final ; C 0M C 81) 432 final ; C0M(82)564 fin al, and C0M(83)483
final.

-  2 -
shipbuilding countries, however, the industry used its position of strength o n  
the market to maintain its level of activity, and this shifted the whole  
burden of the crisis on to the European yards :  thus, the Com m unity
shipbuilding industry's share of global n e w  orders fe ll suddenly to 1 1  X,  
never having been less than 17 X  before.
In these circumstances, Com m unity yards were not able to prevent their  
situation from again being seriously destabilized, although they continued the  
tangible efforts to adjust which they have been making for nearly ten years.
For m ost yards, a  n e w  cycle of reorganization, closures and lay-offs w a s  
inevitable. The authorities were forced to maintain their aid in m a n y  cases  
to prevent the disturbances from having too serious consequences, social  
criteria prevailing sometimes, depending o n  the circumstances, over econom ic  
criteria.
Japanese and South Korean shipbuilders exert a  major influence o n  market  
conditions, if only because they supply 65 X  of the world market. The  
Com m unity cannot easily accept that their behaviour should unfairly  
disadvantage its shipyards. For this reason, in addition to the efforts  
which the latter should m ake as regards improving competitiveness,  
international discipline should be fostered with the aim  of ensuring that  
Japanese and Korean shipyards bear their fair share of the consequences of the  
world crisis. This discipline has proved its worth at certain difficult  
m om ents in the past and should be reactivated and applied now , notably by  
inviting Korea (whose shipbuilding industry has since becom e jointly  
responsible for the trend in market conditions) to participate. Unless the  
industry's efficiency is improved and international cooperation is  
forthcoming, it seem s unlikely that European shipbuilding w ill be able  
gradually to overcome its difficulties in the years ahead.
2. General economic background
The economic situation in 1983 w as an  improvement o n  what it had been in 1982.  
G D P  in volume terms in the O E C D  rose by 2.4 X. Production volum e followed  
m u c h  the sam e pattern, strengthening generally during the second half of the  
year.
According to the latest Com m ission forecasts (which m a y  well have to b e  
revised), economic activity will continue to pick u p  in 1984. G D P  is  
expected to grow  by 4.4 X  in the O E C D  in 1984 ; growth in world G D P  would b e  
roughly the same, with world trade (based o n  imports) expanding by 4.4 X.
M ore limited growth in G D P  (2.2 X) is forecast for the Com m unity in 1984. The  
rate of growth w ill slow down, however, in 1985.
B y  the end of 1983, the m o o d  of the international shipping com m unity (which  
handles the lion's share of world trade) w a s  one of cautious optimism in  
contrast to the gloom  at the start of the year.
3. Trends in the sea transport sector
The decline which had begun in virtually all branches of the_ sea transport  
market in 1980 worsened during m ost of 1983, with the situation again  
dominated entirely by the com bined impact of over-capacity o n  the supply side  
and of w eak dem and for shipping services. The gross tonnage carried b y sea  
fe ll by 16 %  since 1979, while the fleet utilization rate in tonne-miles fe ll  
by 25 X  over the sam e period. These losses were paralleled b y stagnation in

-  3 -
the fleet, though not even this w as enough to prevent further weakening of the  
market throughout 1982. The tension w as heightened by the manifest, growing,  
over-capacity. This imbalance had a  disastrous effect on freight rates,  
where the collapse which started in 1981 continued, sparing virtually n o  
sector of the market.
The table below gives an idea of the main trends.
!  T A B L E  I
iW O R L D  S E A B O R N E  T R A D E  A N D  C A R G O -C A R R Y IN G  F L E E T
Crude oil and oil products
Seaborne trade  
'000 million!I  Fleet*
%  Imillion dwt %Other cargo
|  1973 I  10. .217 ,  100
|  1975I  9·.730 1  9 5
I  1977 11..467 !  112
I  1978 I  io . .646 |  105
I  1979 I  10. .659 1  107
|  1980I  9·.405 I  92
I  1981I  8‘.371I  82|  1982 1  6. .482 ■  63
I  1983 p 1  6. .250 _L_61_T
234.3
313.0
356.1
352.9
350.9
348.4
342.4
322.5
301.6|100 
,134 
152 
|l 51 
.150 
149 
h  46 
F I  38 
,129seaborne trade. fleet 1  
000 million %  million dwt I  %
* A s  at the of year p  =  provisional Source5.187 1001 205,6 | 100
5.636 1091 230,7 | 112
6.050 hl7| 268,5 | 1 31
6.388 | 123 279,8 | 136
7.016 1351 287,0 I 140
7.372 I142| 292,9 | 142
7.469 I 144 305,9 | 149
7.217 1 3 9 1 320,6 I 155
6.930 |134| 331,0 I 156
Fearnleys , Oslo.
These figures also sh o w  h o w  m u c h  the trends varied from one sector of the  
market to another. A s  regards tankers, for instance, the carriage of oil  
products in 1983 w as 25 %  down, in tonne-mile terms, on 1981, bringing the  
total reduction in trade in this sector over the last five years to m ore than  
40 % . The two main reasons for this predicament are the further reduction of  
s o m e  9 % in oil consumption and the increase in supplies from the fields  
closest to the centres of consumption - a  development which has shortened the  
usual voyages. Although the oil-tanker fle e t, which has had surplus tonnage  
for several years, contracted again in 1983 (by 12 %), this w as not enough to  
offset the significant drop in tonnage carried and halt the deterioration in  
the market. The increase in the num ber of vessels withdrawn from the freight  
market in 1983 as compared with 1982, is clear evidence of the depth of the  
depression. Tanker sales to breakers rose and the laid-up tanker tonnage  
began to fa ll only at the start of 1984. S o m e  experts put the surplus tanker  
capacity at almost 50 % , part of it due to less efficient use of the vessels,  
and in particular to slow steaming and to low  load factors.
All concerned broadly agree that the over-capacity in the tanker fleet will  
persist for several m ore years, with oil m ovem ents expected to remain stagnant  
in the short, and possibly even m edium  term. The largest tankers are the  
hardest hit.
Although statistics cannot te ll the fu ll story, the table below sets out s o m e  
of the figures behind these developments.

-  4 -
T A B L E  2
T O N N A G E  W IT H D R A W N  (IN'000 G R T /D W T )
Tonnage laid u p Tonnage broken u p Tonnage used for storage
M onth N o  G R T  D W T  
1978 VII 765 29.651 55.289  
X  737 25.486 47.507N o  G R T " D W T  
1978 1.088 12.840 21.703[■io n th  N o  D W T
1979 I 595 16.678 30.290  
VII 417 11.206 20.063  
X  353 7.490 12.5181979 904 6.997 11.1371979 I 40 7.856 1  
VII 37 6.668 |  
.  X  37 6.672 |
1980 I 298 6.204 10.603  
VII 268 6.767 12.249  
X  233 5.371 9.5121980 887 9.184 15.9401980 I 39 7.112 f  
VII 45 9.199 j  
X  67 14.266 |
T m \  I 229 4.840 8.288  
VII 246 8.618 15.562  
X  287 10.399 19.014|  1981 I 74 16.866 |  
1981 824 9.789 17.517 |  VII 77 15.668 |
|  X  149 35.950 |
JT982 I 353 14.111 26.391  
VII 624 25.437 49.122  
X  1071 35.293 67.260j  1982 I 120 28.757 [  
1982 1.081 18.086 32.160 |  VII 79 18.295 |
|  X  64 13.860 |
|1983 I 1292 40.657 77.168 |  |  1983 I 58 11.812 |  
|  VII 1403 45.093 85.755 |1983 1.323 20.299 36.881 |  VI 70 13.482 j  
|  X  1429 42.641 80.959 |  j  X  78 14..868 j
Sources :  Institute of Shipping Economics, B rem en >  How ard Houlder
Chartering Ltd.
Despite this trend, the operators concerned have not tried very hard to  
improve this section of the market. However, there is n o  denying that  
resolute action could help rem edy the situation. Since a  large proportion of  
the surplus 150 million dwt is destined for the breakers' yard sooner or  
later, m o ves to speed up the process would help restore the balance of the  
market sooner.
Traffic in the dry bulk sector has fallen by nearly 10 %  in the last tw o  
years. This sector has taken a  sharp turn for the worse, which is only to b e  
expected as the vessels ordered were recently brought on to the market -  
against the trend of the market which indicated a  downturn in transport  
requirements - to swell the ovei—capacity which has beset the fleet since the  
end of 1981. Almost 20 X  of the fleet is n o w  surplus to requirements,  
absorbed mainly in the form of laid-up vessels and by a  far lower fleet  
utilization rate.
A s  for the chief commodities in the dry bulk sector, the decline in iron-ore  
shipments continued, coal failed to live u p  to its promise and there w a s  a  
general, in s o m e  cases considerable, slum p in the other raw  materials. E ven  
grain transport fe ll back. Only a  slight improvement is expected in 1984,  
and the status quo m a y  even be maintained.
The overcapacity in the bulk-carrier fleet is unlikely to be absorbed in the  
short term, especially as newly-ordered vessels continue to add to the fleet  
and ship-owners such as the Japanese have persisted in placing massive orders  
for this type of vessel, at the risk of delaying the improvement in freight  
rates. In this section of the market, a  num ber of large operators have  
therefore opted for speculation rather than choosing to m anage their fleet in  
such a  w ay as to encourage a  return to balance between supply and dem and.

- 5  -
The deterioration which struck the m ore specialized sectors and the liner  
trade in 1981 continued in 1983 as it had done in 1982, the over-capacity in  
m ost fleets, including the LPG, ro ll-o n /ro ll-o ff, container and cargo fleets  
tending to grow, and the recession paralyzing further development. However,  
these fleets d o  not appear to be as over-tonnaged as the oil-tanker and bulk-  
carrier fleets and it should be possible to absorb the surplus capacity in the  
short term, with a  few exceptions, once the general economic climate improves  
and provided orders for n ew  vessels remain realistic.
The decline which has been apparent for several years in the fleet flying the  
flags of the Community's M em ber States gained pace, though the world fleet and  
the fleets of m ost shipping nations remained stable or even grew slightly in  
1983. The Community's fleet had the highest proportion of vessels laid u p  or  
broken u p  in relation to the fleet on the seas. The average age of the  
Community's fleet is n o w  slightly greater than that of the world fleet.
Shipowners, and especially those operating tankers and bulk-carriers, have  
been confronted with freight rates which generally fa il even to cover their  
operating costs and which, therefore, have m a d e  it harder for them  to balance  
their books. M an y of the Community's shipowners, having exhausted their  
limited scope for diversification, had n o  alternative but to reduce the size 
of their fleet in order to survive in an industry where capital coefficient  
and indebtedness are generally high and the margin for manoeuvre small. N o  
comprehensive surveys of m ovem ents by the M em ber States' fleets are available,  
but the statistics below amply illustrate h o w  m u c h  the fleet has been trimmed.
T A B L E  3 - W O R L D  A N D  C O M M U N IT Y  F L E E T S
A .Fleet as at 1 July (in m i l lion grt)
I  1960 Ii  I1970 I  1975I1977 1978 1979 1980 1981 1982 I
j1983
WorldI  I  
I  129,81 227,5 I  342,2 393,7 406,0 413,0 419,9 420,8 424,7| 422,6
E E C 1  48,1 I 68,3 I  96,8 105,9 110,9 110,4 111,1 109,9 104,5| 95,9
* E E C I  37,1| 30,0 I  28,3 26,9 27,3 26,7 26,5 26,1 24,61 22,7
W o  rid 1  1  
i  1I
I1
1
B. M em ber States' fleet (in '000 grt) by flag
F  1  o ov ac at 1 7S crapped Laici u p
1 9 B 1 1982 83 I 1981 1982 83 I 1981 1982 1983
I I déc. déc. déc.
G en .ic.n y l 7708 7707 6897 I 143 185 250 I 17 409 5 01J IO eLciur.i 1 1917 2271 2274 j • . • · 58 I •  · •  · •  «
Denm ark 1 5048 5214 5115 j 110 144 •  · I 144 793 843
France | 11455 10771 9868 j 397 479 658 j 297 519 1343
Greece 1 42005 40035 37478 j 1691 3027 2931 I 2308 10248 9937
Ireland 1 268 239 223 I ■ · ■ ■ · · •  ■ ■ I «  · · • ■ ■ ■ · ·
Italy | 10641 10375 10015 j 210 259 705 I 206 1610 1635
lëtherlands 1 5468 5393 4940 I 65 548 394 j ■ ■ · •  · ■ 462
United King4 25419 22505 19122 j 1026 1107 932 I 770 2591 2272
d o m
Sources :  Existing fleet :  Lloyd's Register of Shipping
Other uata Institute of Shipping Economics, B rem en

_________  -  6 -
It
 is clear from the figures that the deterioration has been less severe in  
certain M em ber States, generally in those with an aid sch em e of one form or  
another for shipowners. In any event, the erosion of the Community-based  
shipowners' position reduces their capacity to order n e w  vessels, which in  
turn has an adverse impact o n  the Community's shipyards.
(4)4. Situation in the shipbuilding industry
4.1 General trends
The crisis in the industry grew  m ore intense during 1983 as w a s  revealed above  
a ll by the increased disorder o n  the market :  the fa ll in contract prices
that had occurred in 1982 continued, nourishing speculative d em an d  which in  
turn increased the industry's insecurity, given the over-capacity of fleets  
already referred to. The main reason for this development is to b e found in  
the attitude of the Japanese and, to a  growing extent, Korean yards, which are  
responsible for the conditions o n  the market, since they occupy a  dominant  
position in it . O n e  of the results has been that they have considerably  
increased their share of the world market (64 %  of global n e w  orders in 1983  
as against 50 %  in 1982), mainly at the expense of yards in Western Europe  
(16%  in 1983 as against 26 X  in 1982). The latter consequently regard  
themselves as being in a  "crisis within a  crisis".
Worldwide, the level of n e w  orders paradoxically increased by 28X in 1983. A s  
this increase is the fru it of the speculative operations referred to above,  
the general view is that it does not constitute the beginning of a  revival for  
the industry. O n  the contrary, there is a  strong chance that it will have a  
negative effect o n  future developments :  since m a n y  of the orders for vessels  
have been placed in anticipation of future requirements, they will very  
probably be withdrawn shortly. All concerned, moreover, d o  not expect any  
improvement in the next two years.
The European attempt to adapt is being thwarted by Japanese and Korean yards  
setting low  prices and expanding their capacity. These developments are also  
harming the shipbuilding supply industries. In Europe in particular,  
suppliers of equipment are experiencing increasing difficulties as a  result of  
the fa ll in their shipbuilding business and in prices.
Table 4 - Contract prices for orders of n e w  vessels, 1976-83
(prices in U S  $  million as charged by Japanese and Korean yards) ____
19
76 1977 1978 1979 1980 1981 1982 1983
30.000 dw t proouct carrier 15.0 15.0 16.0 23.0 26.0 25.0 17.0 16.0
87.000 dw t tm k  e  r s 16.0 16.0 20.0 30.0 36.0 40.0 25.0 24.0
96.000 dwt oil/bulk/ore(OBO)23.0 21.0 24.0 35.0 47.0 44.0 30.0 28.0
30.000 dw t in Ik  carriers 11.0 11.0 12.0 15.5 20.0 19.0 13.0 1 2.0
70.000 dwt b  i  ilk  carriers 16.0 16.0 19.0 26.0 30.0 29.0 19.0 18.0
120.000 dw t bulk carriers 24.0 22.0 26.0 33.0 44.0 42.0 26.0 2 5.0
125.000 c b m IX  G  carriers 105.0 115.0 115.0 125.0 150.0 175.0 150.0 150.0
7 5.000 c b m L P G  carriers 42.0 40.0 45.0 60.0 75.0 75.0 53.0 50.0
5.000 dw t ro-ro 10.0 10.0 12.0 14.0 16.0 20.0 15.0 1 2.0
Source :  FearrUeys _ _ _ _
^  
S ee the Appendix to this report for a  guide to understanding the  
interpreting the units and sources of information used in this section,  
in particular that the observations m a d e  are based o n  the cgrt figures  
supplied by Lloyd's Register of Shipping (LRS). Greece is ^Luded in  
Com m unity figures for 1981 and after, though not in those provided b y the  
O E C D , which has n o  data for that country.

- 7 -
4.2 Situation in the Com m unity  
4.2.1 Production
In 1983 Com m unity production rose by roughly 6 Z  compared with 1982 to reach  
2.7 million cgrt. (This w as 48 Z  less than in 1976). There were technical  
reasons for this increase, which did not indicate an improvement in  
shipbuilding program m es - yards have simultaneously slimmed the workforce by  
9 % . A s  the num ber of n e w  buildings dwindled, a  higher percentage of the  
workforce w as engaged on completing vessels under construction, thus speeding  
u p  the rate at which these were turned out. The only exception to this trend  
is the United Kingdom, where jobs have been cut m ore swiftly and to a  greater  
extent than in the other M em ber States. In addition, the n e w  orders obtained  
in 1983 represent only 60 Z  of the production level for that year, or 32 %  of  
that for 1976. Production, therefore, is clearly going to contract in future  
in a  num ber of Com m unity yards.
T A B L E  5  - P R O D U C T IO N  (C O M PLETIO N S) in '000 C G R T
—vm 1978 mo---------- l— m
i------- 19
83 |
I 1  L R S O E C D L R S O E C D |  L R S O E C D |  L R S O E C D |  L R S 0 Z C D  |
I I  coeff. coeff. n e w n e w I  n e w n e w |  n e w n e w |  n e w n e w  |
I j  A W E S 1967 coeff. coeff. 1 coeff. coeff. jcoeff. coeff. j  coeff. coeff.|
iI  G e rm a n y1
11468,0 1630,0 1029,1 1059,6 1  596,2 618,5 I  757,3 763,5 1  811,3----------- f
92
5,51j  Belgium |  139,8 141,0 165,2 154,8 1  129,6 126,7 I  83,0 85,5 I  173,2 153,31j  D e n m a rk I  560,6 425,0 362,5 378,7 I  382,4 267,9 I  329,2 313,3 I  338,5 405,9 j
|  France i  672,4 1117,0 430,6 440,2 I  267,8 301,8 j  353,3 319,0 j  356,8 376,8 j
|  G reece . X X X X . X X . X X j  . X X .  X X I  61,8 . j  35,7
j  Ireland I  20,3 14,0 5,0 - I  3,0- j -j  19,2 17,7||  11 a  l y  * |  353,9 314,0 305,2 283,1 I  345,5 287,4 I  156,2 176,6 I  217,0 128,8 j
j  M  e  t ii e  r l 940,0 507,0 513,9 455,0 I  249,5 239,6 |  390,0 366,0 I  415,8 406,51
j  U  . K  . 985,1 824,0 718,4 708,9 I  458,6 513,2 j  394,0 420,8 I  319,3 349,2|
r
|  E E C  
15140,1 4972,0 3529,9 3480,3 1 2432,7 2355,1 |2524,8 2444,7I  I
j2686,8 2763,7|
I  I
*The O E C D  figures for 1976 and 1976 cover only the main yards ; from 1980 the  
figures cover a ll yards.
** Not available.
4.2.2 N e w  orders
N e w  orders in the Com m unity fe ll back sharply in 1983 to 1.6 million cgrt (21Z  
d o w n  o n  1982), whereas worldwide they went u p  by 29 % . The main reasons for
this development have been given in point 4.1. It is noteworthy that over  
the last two years orders in the Com m unity have declined by 36 %  while  
worldwide they have increased by 5  Z.
In a ll the M em ber States except for Denmark, the volume of n e w  orders m akes it  
impossible to maintain the 1983 level of activity.

-  8 -
Shipyards' previous adjustment measures are thus constantly being jeopardized  
by the worsening situation >  this creates uncertainty and tension at all  
levels, notably as regards industrial relations.
In 1983, Com m unity shipyards' share of a ll n e w  orders placed throughout the  
world contracted dramatically, falling to 1 1  % , w h en  it had never been less  
than 17 %  even during the m ost critical periods of the crisis. The other  
Western European countries sa w  their market share shrink by about the s a m e  
amount. Japan's share of world orders rose to 50 %  in 1983 having been 42 %  
in the previous year ; similarly Korea's share is definitely increasing (14%  
in 1983 as against 9 %  in 1982).
This development has increased fears and uncertainty in the European  
shipbuilding industry and, since requirements have remained stagnant at a  m u c h  
reduced level, has given rise to increasing censure of Japanese and Korean  
competitors' pricing policy and continued capacity expansion.
T A B L E  7  - T R E N D  IN T H E  M A R K E T  S H A R E  O F  T H E  M A J O R  SHIPBUILDING R E G IO N S
iI
'Production
j'E C *
'Rest of A W E S **  
jTotal of all  
'Western Europe  
jJapan
!Rest of world  
i  of which  
! Eastern bloc  
; South Korea  
)
Total
‘  N e w  order  
!  intake  
»  E C
I  Rest of A W E S **  
l Total for all  
j  Western Europe  
,  Japan  
Rest of the  
world of which  
Eastern bloc  
South Korea
I Total
—1976 
1000 C G T T1978
1000 CGftT
5140,1 23,3 3529,9
3145,7 14,2 2303,1
8285,8 37,5 5832,9
8348,8 37,8 6120,5
5444,4 24,7 4593,4
2755,4 12,5 2132,3
22078.2 100
2756.6  
1903,0
4659.6  
7337,5  
3985,3
1895,9
I 15982.4 10021,3
13,9
35,2
37,0
Z7,8
12,9
16546,7 100
17,2 2012,6 18,6
11,9 1367,8 12,7
29,1 3380,6 31,3
45,9 4333,9 40,1
25,0 3081,8 28,6
11,9 1146,8 10,6
10796.5 1001980
iooo e & R ? ;
2432.7  
1499,0
3931.8
5207.2
3495.3
1213,5
445,719,211,931.141.2 
27,7
9,63,5
12635.2 1001982
1000 .--G G fiT
2524,8
1760,2
4285.0
5811.1  
4491,7
1678,4
880,3|  1983
%  I 1000 CG RT *
17.3
12,1
29.4
39.8
30.8
11.5
6,0
14587.8 100 I 13552,3 1 Q Q2686,8
1688,8
4375,6
4908,2
4268,5
1634,8
985,5
14357.5 1QQ_!
j 2463,8 17,2 2051,8I
17,8 !
j 2049,5 14,3 913,7 7,9 |
| 4513,3 31,5 2965,5 25,7 j
I 6708,3 46,7 4859,4 42,1 I
| 3136,1 21,8 3708,3 32,2 |  
II
I 467,9 3,3 1069,0 9,3 I
I 939,3
I6,5 1002,5 8,7 |
I
11533.2 10Q1623,8
780,7
2404.5  
7389,1
5056.5
1544.0
2147.1
* The 1976, 1978 and 1980 figures d o  not include Greece. Source :  Lloyd's
**9A W E S r :°^Association of W est European Shipbuilders. _  M em bers from outside  
the European Com m unity include the shipbuilders' associations of Finland,  
Sweden, Norway, Spain and Portugal.19,8
12.5 
32,3 
36,2
31.5
12,1
7,3
10,9
5,3
16,2
49,8
34,0
10.4
14.4
14850.1 10Q

In 1983 the Community's shipowners ordered m ore or less the sam e overall  
tonnage as in 1982 but placed only 5 1  X  of their orders with yards in the  
M em b er States, compared with an average of 70 X  in previous years. In  
tonnage terms, therefore, orders fe ll back sharply to 1.1 million cgrt in 1983  
as against 1.6 million in 1982. Greek shipowners placed less than 1  %  of  
their orders with Com m unity yards in 1983, and U K  shipowners 39 %  ; in the  
other M em ber States the proportion of such placings ranges from about 70 %  
(France and the Netherlands) to 90 X  (Belgium, Denmark, G erm any and Ita ly ).  
These figures d o  not include orders from such shipowners' subsidiary companies  
operating under a  non-Community flag, especially o n  open registry :  there is
n o  reliable information for evaluating this kind of order.
A s  Com m unity shipyards m anaged m ore or less to maintain their exports to non-  
m em b er countries in 1983, the losses in sales which them  to slip back were  
mainly incurred within the Community.
TABLE 8 -  B R E A K D O W N  O F  O R D E R S  B Y  FLAG
'
'OOOcgrt
Orders placed b y  
Com m unity ship­
owners
T O T A L1976J) CO1978 (x)
CO1980_  <ji___m19
82 w__L J_0 )--< D -19
® w „*__U 4 i  ■  . f t ilat i ona t  
market
D t h  e  r E C  
;o
untri e
th ird  
:o
unt ri e
to ta l E E
th ird  :  o
unt r i e
Rational
market
)  t h  e  r E C  
:o
unt r i e
th ird
;ountrie
nat i ona  
m  ? r k  e  t
other E  
C  
o  u  n  t r i
th ird  
co
unt ri( O
 4 - >  L U  * r *  · ► ■ CO) C L O — + - >  T3 w •  i — (DC C 4 - *  r o  _C 3 « r -  ;r o  E - M  o - c  cC O  o - * - ■  < _
11i6« |  5%
11302731X8CK2CK■ 1  ■  1 1  1 1  163X |  7X I  30X  
1  1 1  1 2381I  I  
!  I  
I  I77X |  1% 22X
I  I  
I  I18761  1 1  1 1  149,9X |1,3X |48,S
I  I  
I  I2222.4
Orders received  
by Com m unity  
shipyards
T O T A L1170X |  5%1
275625X74X
723326X1  1 1  161X |  7X |  32X
I  I
2476I  I  
I  I73X |  1X |  26X
I  I
1988I  I  
I  I68,3X |1,8X | 29,9
I  I
1623.8
Source : LR S
* N o  breakdown within the Com m unity is available for 1978.
Note :  Greece is included in the Com m unity figures for 1981 onwards ; there
m a y  be slight differences in the totals com pared with similar data in other  
tables.
The tendency for each M em ber State's yards to receive remarkably few orders  
from owners in the other M em ber States - m ore pronounced in 1982 - continued  
in 1983. Community-based shipowners thus almost always continued to turn  
either to one of the shipyards in their o w n  country or else to one in a  non-  
Com m unity country. The fact that the Community's shipowners placed a  m ere 1 X  
of their orders with yards in other Com m unity countries is evidence that n o  
progress w as m a d e  on opening-up the c o m m o n  shipbuilding market in 1983.

,vr 1C  -
O n  a  world scat a, demand fo r th-r  various types of vessel w as dist'rquish■ . · . : '  i-  
a  spectacular im provettss-nt i n  o r i t - - \ t  for bull· carriers, almost 90 %  of ;·::·: 
were placed in Korea and J*p*n. The doubts about  whether such orders ar:· 
warranted in view of th-· · = · .  h*v·  been set out above, T h ferv
w as also a  certstn th^se ‘ vsre p > · 1r··  v .  .,·■· tor
small-tonnage vessels, notably product— . « * · ·  ■  iers,. < ·■> .? tensions a s  rstgard.:- ^hv  
cver-capaci ty in these two -Meets.
TABLE 9 ;  TREND O F  N E W  O R D E R S  B Y  TYPE O F  VESSEL
,  ' coo
C G R TÏ a n  ke  r s  j
iB u l 
c a rrie* i  
!Cargo |
iNon-caron !
!(in clu d in g  !  
non- s-neeiflstsi!----— m ~ r " 1 Y T T c o n (%/ | T t) j
I  1977 World 790,6j1783,2 I8497,3 i2969,8 I14040,9 j
,  E E C 30,9 (3 ,9 )i 75,1 (4 ,2 )i 1764,4 (20,8)| 670,5(2 2,6) | 2540,9 (18,1) ;
'  1978 WorId 1185,4 j534,8 !6163,8!2912,7 i10796,7 1
|  E E C 56,2 (4,?>I ƒ  6(4,4) | 1341,3 (21,8)i 591,5 (20,3) 2012,6 (18,6? !
,1979 World 3364,8iI2744,9 I5148,4 I2949,8 i14207.9 !
E E C 168,1 (5 ,0 ) i466,5 (1?) j 1172,6 (22,8)j 747,6 (25,3)| 2554,8 (18,0) j
11980 World 2960,2 4325,3 I4780,1 I12291,9 14357,5 I
•  EEC ” 273,7 (9,2)|
i425,9 (9 ,8 )i .1023,4 (21,4)I 740,8 (32,3) 2463,8 (17,2) {
,  1981 World 1166,7 4934,9 !4967,9 12433,0 14053,1 !
I  EtC 75,1 (6,4 ! 487,9 (9,9)j 1342,7 (27,0)| 606,4 (24,9) 2525,2 (18,0) !
1982 orld 662,6 i2335,3 15679,9 H2135,4 10813,2 I
1  E E C 70,3 (10,6)| 197,5 (8,5)1 1093,2 (22,0)i 628,0 (29,4) 1989,0 (18,4) !
!  1983 World 1682,1 it5370,3 15910,8 !1886.9 14850,1 i
!  Te c
I92,3 (5,5) ! 110,7 (2,1) 1039,9 (17,6)! 380,9 (20,2) 1623,8 (10,9)1i
Source :
Within the Community, developments for shipyards in 1983 in respect of the  
types of vessel ordered were not very different from those in 1982, with the  
emphasis as regards the quality of Com m unity output s till o n  the construction  
of sophisticated vessels.
A.2.3 Order books
The fa ll in n e w  orders affected the  
(dow n by 28 % >; B y  the end of 1983
3.4 million cgrt, never having been  
the crisis.order books, which contracted sharply  
it had shrunk to the distrubing level of  
lower than 4.7 million cgrt, even during
T A B L E  10 - O R D E R  B O O K S
000 cgrtI.
L
» E C
j^ R e s t of A W E S  
''W estern Europe  
S Jap an
jEastern blocto 31.12.78 to 31.12.80 to 31.12.82 t o
T ~  L R S  I QE C  D “ I T'RS ~T 0 33
South Korea|  5087,2  
I  3957,2  
I (9044,4)  
!  5464,6  
!  2121,7
I Other regions! 6787,9
r ..
|T
 o  t a  li  23418,64870
3834
(8704)
4938T
I  4911,9 i  4799,6  
i  43-38,1 I  3975,1  
| (9310,0)| (8774,7)  
I  7297,8 !  6541,0  
j  1964,9 i
I  7019,5 !
!  25592,2 !
i_____ LL R
S
4738.3
3474.3  
(8212,6)
6640.2
2206.2  
1854,9
4817,60  Ë C D
4358,2
3185,7
(7543,9)
6622,6
23731,51L R S
3418.9
2481.9  
(5900,8)
8477.9  
2546,0
2898.4
4295.4
24118,5!

A L L  M em ber States were affected by the contraction of the order book, except  
for D enm ark where yards enjoy cLoser Links with nationaL shipowners. The_  
num ber of yards having to cope with interrupted work programm es is increasing.  
In the circumstances, m u c h  of the effort that has gone into improving  
competitiveness is wasted through productivity being Lowered by the increased  
inactivity of production fa cilitie s  and the workforce, even though in m a n y  
cases Com m unity yards were obliged to carry out further reductions in their  
capacity, and this w ill continue in 1984. These measures are not easy to  
swalLow, for Japanese and Korean yards have not so far contemplated applying  
any discipline as regards capacity and have thus maintained a  destabilized  
market ; it is only very recently that the intention of Korean operators not  
to continue expanding capacity has been learned.
T A B L E  1 1  - O R D E R  B O O K S  IN T H E  E U R O P E A N  C O M M U N IT Y  (thousand cgrt)
LRSO E C D
|  G erm any  
I  Belgium  
i  D enm ark  
|  France  
I  Greece  
l  Ireland  
i  Italy  
i  Netherlands  
j  United K ingdom
iProd. ToraLo  rdernook
1983  +n31.12.83For del i \e r y 
1984 1985 1986Prod. T o ta' -  For delivery,
"orderbook  -jn
1983  *$1.12.83 1984 1985 1986
ISÏT^T
173.2 I  
338,5 I
356.8  
35,7  
19,2
217,0
415.8
319.3649,ITT
143.7 I
707.7 !  
598,6
146.1
2,1
356,3
308.8
506.1474~y
90,5
366,7
479.1
100,0
290.1  
241,0  
383,516ÏÏJ6-
53.2 
290,3  
119,5
40,5
2,1
66.2
67,8
104,2T W
-  I
50,7 j  
5,6
18,4925,5| 7Ü4W 
153,31  147,9  
405,91  690,5  
376,8| 548,3
17,7
128,8
406,5
349,2263,1
481,6514V T T
85,0
316.0
425.0
200,0
322,0190,71  “ 1
62,91  -
298,01 76,5  
123,3| -
54,0| 9,1  
159,6| -
477,4 j 357,0 j 103,4|17,0
Com m unity— c — ------------r ----------- 1------------- 1  r  I  i  I
|2
 686,8 1^18,9  ',2425,4 j  9 ft,4  j  89,i j  2763,71 ,  3 5 1  3,5 |  221 9,0j _ _99J_, ^10 2 ^ 6 )
4.
2.4 Em ploym ent
Having fluctuated only slightly since 1980, the num bers employed in the  
Community's shipyards fe ll by 9 %  in 1983 as a  result of the situation  
explained above. All M em ber States were affected by this contraction, which  
w as particularly strong in the United Kingdom, but weaker in Denmark, G erm any  
and France ; in the latter, significant job-reduction program m e have been  
drawn up, however, and w ill probably be implemented without delay.

-  1 2  -
4*3 Prospects
In view of the outlook for the development of the general econom y (see Section  
2) the conditions exist for a  certain recovery in seaborne trade in 1984-5*  
Beyond this time-horizon, the outlook is very uncertain :  the m ost widely  
adopted hypothesis is one where there will be a  slowdown in the m odest growth  
achieved in 1983 and 1984*
This development will not be sufficient to change noticeably the nature of  
the problems in the shipbuilding sector* In fact, fleet overcapacity is  
such that it could not be taken u p  by such a  m odest advance in seaborne trade  
in the short to m edium  term :  so  long as this overcapacity persists, d em and
w ill remain depressed, and shipyards will have to operate in a  buyers' market*
The European and Japanese professional associations have not finished, at the  
time of drafting this report, bringing up to date their forecasts of the need  
for ships, which were last prepared in 1982 (see Fifth Report), with the  
result that at present the basis is lacking to express in figures the  
consequences of recent developments in the shipbuilding market*

- 13 -
T A B L E  ‘'■ I :  E M P L O Y M E N T  IN SHIPBUILDING IN T H E
C O M M U N IT Y  (N E W  BUILDING)
1975 1978 1979 1980 1981 1982 1983
Belgium* | 7467 | .6614 | 6258 | 6523I  i
I  6119 j 5.031 | 4388 |D enm ark 16630 j 12000 j 9900 j 11400 j 11350 I 11800 j 11200 jFrance 1 32500 j 25300 j 23000 j 22200|  22200 j 21600 j 21000 jG erm any | 46839 i31113 I 27369 j 24784 I  26521 j 27600 | 25966 jGreece a  Ia  I•  |a I  3393 j 3696 jIreland 869 I 840 j 750 | 750 I 762 |882 | 550 |Italy j 25000 j 20000 j 19000 j 18000 I  16500 j 13750 j 12800 jNetherlands j 22662 j 17540 |14540 j 13100 I 13100 j 13100 I 12000 jUnited Kingdom  j 54550 i 41050 j 31200 j 24800|  25345 |25000 j 20486 j
Sub-total f i----r
(without Greece) j 206517 |154457 | 132017 | 121551 j  121897 j 118763 | 108390 |
Total j! TT252W**yr"122459 |----1
(Table compiled from national sources).
* Revised series.
** The figures for 1981 onwards include Greece, the data being based o n  the  
estimates m ad e by the Greek shipbuilding industry its e lf. According to them,  
the Greek workforce numbered 2316 in 1975 and 2616 in 1980.
5. Guidelines for action at Com m unity level
In response to the worsening(^jtuation of the Community's shipyards, the  
Comm ission revised its plans at the beginning of 1983 for policy guidelines  
o n  restructuring the industry. Together with the shipbuilding community, the  
Com m ission has tried to give a  boost to the implementation of the measures  
called for in these guidelines.
The following steps, in particular, should be noted :
-  the proposal,for a  Directive amending the 5th Directive o n  aid to  
shipbuilding ;
- the intervention of the European Regional Development Fund in operations of  
reconversion in several shipbuilding zones. Support for investment projects  
under the quota section has been considerable in recent years. In the non­
quota section, the Fund  contributes, under the heading of specific Com m unity  
measures to help regional development, towards reconversion actions in certain  
zones particularly affected by the restructuring of the shipbuilding industry.  
The Comm ission is n o w  considering h o w  far the deterioration of the situation  
in this S!'-.:or would warrant the extension of these measures to other zones.
- the :  of noticing wth industry, within the framework of Com m unity support  
for R & D , of investigaty-nr. forming the firs t stage of an attempt to strengthen  
technological cooperation in industry within the Com m unity ;
a  study of oossible w  -/s of encouraging shipowners to place m ore orders  
with (  r >  ·  -I'jri :tv shipyards,
ÎÛ--K83) 65 final.
C O · 1  (;,/<> 73 final. .

-  H  -
In addition, within the Community, the Comm ission is trying to get port  
inspection tightened u p  in order to improve safety of m ovem ents y eliminating  
sub-standard vessels m a y  also help indirectly to improve dem and. Externally,  
the Comm ission continues to regard it as extremely important - as is clear  
from the above analysis - that the countries w hose industry exerts an  
influence on the market com m it themselves to avoiding any action that might  
encourage disturbance and, in particular, increase the difficulties of the  
other market participants. It has therefore stepped up its efforts regarding  
international cooperation in the industry, notably within O E C D . In this  
context, Japan very recently announced  that it has decided to increase  
measures to monitor the prices charged by its shipyards ; also, the Koreans  
have announced that they intend to stop expanding  capacity.

- 15 -
A P P E N D IX
1, The tables giving the trend of completions, n e w  order intake and order  
books in the M em ber States' shipyards are taken from two different sources :  
O E C D  and Lloyd's Register of Shipping (LRS);
W here the M em ber States are concerned, the O E C D  statistics constitute an  
official source but provide a  m ore limited range of data, there are sometimes  
differences of approach as regards the m o m en t w hen an order can be considered  
being booked and as regards the classification of vessels, there are breaks in  
the range of coefficients used for conversions into cgrt and d o  not permit  
worldwide comparisons to be m ade.
The figures produced by L R S  are not infalible either. However, given that  
they present a  wider range of data and that - over a  period of time - the  
figures in cgrt are m ore comparable, it has been considered preferable to use  
this source for commentaires as the objective is to present hom ogeneous  
references and, moreover, they are being used worldwide by those concerned  
with these matters. The discrepancies between the two sources originate  
mainly from different new s as to w hen an order is regarded as being definite,  
in the classification of vessels and in the coefficients for conversion into  
cgrt concerning the years 1976 and 1977. Despite certain differences which  
can sometimes arise from this, the two sets of data sh o w  trends which  
generally point in the sam e direction. Since the divergence between the two  
sources are only random, and the present report is essentially concerned with  
indicating the main trends, the reference to only one source is generally of  
n o  consequence.
2. Cgrt - compensated gross registered ton, a  measurement which takes account  
of the volume of work that goes into building a  vessel, calculated o n  the  
basis of the grt and of special coefficients for different vessel types and  
sizes (grt x  coefficient = cgrt). N e w  coefficients for cgrt calculations  
were agreed upon by the O E C D  in 1977. The L R S  figures for 1976 are based o n  
A W E S  coefficients, which were the basis for the n e w  O E C D  figures - without  
being completely comparable ; the O E C D  coefficients for 1976 are however  
based on O E C D  1967 coefficients, which diverge markedly from the n e w  
coefficients for certain types of ship. This explains w h y  certain 1976 O E C D  
values are not at a ll comparable with the other series.