page_title: Shipbuilding
section_title: Worldwide shipbuilding industry
hierarchical_section_title: Shipbuilding / Worldwide shipbuilding industry
caption_attribution_description: English: MS Oasis of the Seas, under construction during July 2008.
context_page_description: Shipbuilding is the construction of ships and other floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation that traces its roots to before recorded history.
  Shipbuilding and ship repairs, both commercial and military, are referred to as "naval engineering". The construction of boats is a similar activity called boat building.
  The dismantling of ships is called ship breaking.
context_section_description: After the Second World War, shipbuilding (which encompasses the shipyards, the marine equipment manufacturers, and many related service and knowledge providers) grew as an important and strategic industry in a number of countries around the world. This importance stems from:
  The large number of skilled workers required directly by the shipyard, along with supporting industries such as steel mills, railroads and engine manufacturers; and
  A nation's need to manufacture and repair its own navy and vessels that support its primary industries
  Historically, the industry has suffered from the absence of global rules and a tendency towards (state-supported) over-investment due to the fact that shipyards offer a wide range of technologies, employ a significant number of workers, and generate income as the shipbuilding market is global.
  Japan used shipbuilding in the 1950s and 1960s to rebuild its industrial structure; South Korea started to make shipbuilding a strategic industry in the 1970s, and China is now in the process of repeating these models with large state-supported investments in this industry. Conversely, Croatia is privatising its shipbuilding industry.
  As a result, the world shipbuilding market suffers from over-capacities, depressed prices (although the industry experienced a price increase in the period 2003–2005 due to strong demand for new ships which was in excess of actual cost increases), low profit margins, trade distortions and widespread subsidisation. All efforts to address the problems in the OECD have so far failed, with the 1994 international shipbuilding agreement never entering into force and the 2003–2005 round of negotiations being paused in September 2005 after no agreement was possible. After numerous efforts to restart the negotiations these were formally terminated in December 2010.  The OECD's Council Working Party on Shipbuilding (WP6) will continue its efforts to identify and progressively reduce factors that distort the shipbuilding market.
  Where state subsidies have been removed and domestic industrial policies do not provide support in high labor cost countries, shipbuilding has gone into decline. The British shipbuilding industry is a prime example of this with its industries suffering badly from the 1960s. In the early 1970s British yards still had the capacity to build all types and sizes of merchant ships but today they have been reduced to a small number specialising in defence contracts, luxury yachts and repair work. Decline has also occurred in other European countries, although to some extent this has reduced by protective measures and industrial support policies. In the US, the Jones Act (which places restrictions on the ships that can be used for moving domestic cargoes) has meant that merchant shipbuilding has continued, albeit at a reduced rate, but such protection has failed to penalise shipbuilding inefficiencies. The consequence of this is that contract prices are far higher than those of any other country building oceangoing ships.
caption: MS Oasis of the Seas, the third largest passenger ship in the world, under construction at the Turku shipyard that was taken over by Meyer Werft in 2014
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