Achieving 2 Consecutive Years as World No.1 in Shipbuilding Orders... Shipbuilding Industry Employment Also Sees a 'Positive Trend'

Last Year, South Korea's Orders Reach 9.43 Million CGT, Surpassing Competitor China
December Sees Full Orders for LNG Carriers... Employment Recovery
Positive Outlook Ahead Due to Large Projects and Rising LNG Ship Demand

[Asia Economy Reporter Kim Bo-kyung] Last year, South Korea's shipbuilding orders surpassed China to rank first in the world for the second consecutive year. As the domestic shipbuilding industry shows signs of recovery, a positive trend is emerging in shipbuilding employment, which had been stagnant for several years.

According to the Ministry of Trade, Industry and Energy on the 7th, South Korea secured 9.43 million CGT (Compensated Gross Tonnage) in ship orders last year, ranking first globally. Out of the total global ship orders of 25.29 million CGT, South Korea accounted for 37.3%. China ranked second with 8.55 million CGT, followed by Japan (3.28 million CGT) and Italy (1.14 million CGT). South Korea also ranked first in terms of shipbuilding order value at $22.3 billion, followed by China ($20.3 billion), Italy ($7.5 billion), and Japan ($6.1 billion).

Until the first half of last year, South Korea lagged behind its competitor China by about 1.1 million CGT in order performance, but through concentrated orders in the second half, it overtook China and maintained the world’s number one position for two consecutive years. In particular, in December, South Korea secured all 11 large liquefied natural gas (LNG) carrier orders worldwide, accounting for 56.7% (1.74 million CGT) of the global orders totaling 3.07 million CGT.

The number of employees in the shipbuilding industry, which hit a low of 105,000 in August 2018, is also showing signs of recovery. By November last year, it had increased to 111,000. In Dong-gu, Ulsan, where shipbuilding is concentrated, the workforce decreased to 46,915 in 2018 but increased by 1,162 to 48,077 by November 2019. Employment trends in shipbuilding mirrored shipbuilding volume. Due to the order cliff in 2016, the volume hit a low of 7.72 million CGT in 2018 but has been recovering since the second quarter of last year due to increased orders.

[Image source=Yonhap News]

An official from the Ministry of Trade, Industry and Energy evaluated this as "an achievement made possible by the technological capabilities and quality demonstrated by our industry in key ship types such as LNG carriers and ultra-large oil tankers, despite sluggish global orders amid increased uncertainty caused by the prolonged US-China trade dispute."

Clarkson Research, a British shipbuilding and shipping analysis firm, forecasts that global ship orders will significantly increase to 38.5 million CGT this year compared to the previous year. Large-scale projects in Russia, Qatar, and Mozambique are scheduled for orders this year, and the shipbuilding market is expected to show clear improvement. Especially, as environmental regulations are strengthened worldwide, demand for LNG carriers is increasing, suggesting that the boom in Korean shipbuilding will continue for the time being.

The ministry official added, "We plan to continuously support securing the future competitiveness of the shipbuilding industry by responding to the paradigm shift toward eco-friendly and smart shipbuilding, and maintaining leadership in future markets through autonomous ships, eco-friendly vessels, and smart Korean-style yards."

Korean shipbuilding maintained the world’s number one position for a long time but lost it to China for three years from 2015 to 2017. This was due to China’s rapid growth by monopolizing domestic orders. Coupled with the global shipbuilding downturn, Korean shipbuilding suffered from restructuring and an employment freeze.

This content was produced with the assistance of AI translation services.