Chapter 5 Changes in International Environment and Transport


Section 1. Worsening Depression in Shipbuilding Industry


1. World-wide Position in Excess Shipping Capacity and Sharp Decrease in Shipbuilding Work

   The world shipping market continues to remain sluggish due to a great excess of ships, and the world-wide volume of idle tonnage also continues to remain at an extraordinarily high level (Figure 2-5-1). Consequently, new ship construction has been sharply curtailed, and orders on hand for new ships still remain low. Accordingly, the shipbuilding market throughout the world has entered a stage of depression.
In the shipbuilding industry in Japan, the volume of work on hand has diminished to one-fifth that of the peak level. In addition, those industries associated with shipbuilding are also expected to suffer from a demand decrease in all fields (Figures 2-5-2 and 2-5-3).

2. Depression Combatting Measures and International Cooperation

   Under these circumstances, the depression problem was deliberated at the inter- national conference of OECD's shipbuilding division. And, in May, 1976, a general instruction principle aimed at a reduction in shipbuilding capacity was adopted. At home, meanwhile, the Minister for Transport, in response to a report concerning the "Future Prospect of Vessel Construction Demand and the Ways and Means of Preparation of Shipbuilding Facilities" compiled by the Council for Rationalization of Shipping and Shipbuilding Industries provided the shipbuilding industry with guidelines concerning ship-yard operations. According to the guidelines, the number of operation hours for fiscal 1977 was reduced to about 707o and for fiscal 1978, 65% of the standard fiscal year figures.
   Further, Western European shipbuilding countries had been criticizing Japan's tactics for obtaining orders for construction of new vessels. Japan then decided in February, 1977, on measures including a price increase of about 5% for export vessels. This measure was taken with a view to maintaining harmony in relations with those countries.

3. Future Issues

   Japan's shipbuilding industry has made a great contribution to the Japanese economy as one of the key industries. The influence it has over the economy in regional areas is also extremely great. In light of these facts, therefore, Japan's shipbuilding industry should concentrated their efforts on the following points in the future: to reorganize shipbuilding capacity and operation to be more suitable to the diminishing demand for shipbuilding in the future, to make concerted efforts to develop demand, to endevor to adequately comply with the management environment, and to make changes with due consideration to international situations so as to maintain international harmony.

 


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