This chapter situates the UK shipbuilding industry within global market trends and provides a comparative analysis with peer shipbuilding economies, Norway, the Netherlands, Italy and Spain. The chapter shows how growth and resilience among these countries have been linked to specialisation in high-value segments, export-oriented production and innovation. The chapter identifies key submarkets and emerging technologies that could offer similar opportunities for the UK.
Peer Review of the United Kingdom Shipbuilding Industry
Abstract
Globally, shipbuilding has grown significantly in the twenty-first century, but the key players have changed.
Production has increasingly moved towards Asia; China, Korea, and Japan are the largest shipbuilding economies along various indicators of output and performance. At the turn of the century, Korea, Japan, and Europe led the shipbuilding market in terms of orders by country and region. However, in approaching the 2010s, China’s and Korea’s orderbooks increased while other major players maintained a relatively steady number (Figure 3.1). Following the 2008 financial crisis, there was a general decline. Since 2021, there has been a steady increase in orders, with China capturing an even greater share (Figure 3.2).
In 2024, the global orderbook constituted 132.8 million CGT, of which China accounted for 66.4 million CGT (50.0%), Korea 38.9 million CGT (29.3%), Japan 14.4 million CGT (10.4%), and Europe 8.6 million CGT (6.5%).
Note: This graph includes sea-going vessel above 100 GT, excluding vessels built for the defence sector, not covered in Clarksons.
Source: OECD calculations based on World Fleet Register (Clarksons), and Shipping Intelligence Network, Clarksons research, https://sin.clarksons.net/Home [Access: February 2025].
Note: This graph includes sea-going vessel above 100 GT.
Source: OECD calculations based on Shipping Intelligence Network (Clarksons).
In terms of global competitiveness, strategies adopted among top shipbuilding economies which could relate to productivity increases are order completions for larger ships, increased yard size, and introduction of advanced facilities.
In the non-defence space, the United Kingdom has faced a decline in its global market share and production capabilities. Whereas global shipbuilding volumes have increased significantly since 1990, the UK’s shipbuilding volume has decreased in both absolute and relative terms. Similarly, while the average build time has decreased rapidly since 1990 (as build time/CGT), that of the UK has fluctuated and remained significantly higher than the global average (Figure 3.3).
Note: This graph includes sea-going vessel above 100 GT.
Source: OECD calculations based on World Fleet Register (Clarksons).
In terms of global competitiveness, the UK has not kept pace with achieving cost reduction – productivity increases – associated with various potential factors: order completions for larger ships, yard size, and introduction of advanced facilities. Later sections also highlight the impact of an effective shortage in skilled, experienced labour.
Other European shipbuilding economies have secured certain segments of the global market despite facing similar challenges in competing against China, Japan, and Korea.
Country profiles: a snapshot
Across the board, resilience among peer shipbuilding economies tends to exist alongside specialisation into high-value segments and export orientation, as well as a positive reputation.
Norway has demonstrated resilience by swiftly transitioning to the production of cruise ships and ferries in response to the structural and global decline in demand for offshore oil vessels, which were previously their mainstay. However, it has not been sufficient to fully restore production to previous output levels. Moving forward, technological specialisation and a focus on emerging technologies, such as alternative fuels and automation, will be essential strategies for the industry to remain competitive and meet future market demands.
In the Netherlands, there has been a decline in vessel completions from 2000 to 2019. However, since 2020, the industry has shown signs of recovery, driven by steady output in specialised, high-value segments such as superyachts, dredgers, and custom cargo vessels. Dutch shipyards have increasingly focused on complex, technology-intensive vessels, leveraging their reputation for innovation and sustainability.
Italy has maintained a strong position throughout this period and has recovered well from the decline experienced between 2011 and 2015. This recovery can be attributed to the industry's ability to leverage its positive reputation and strong position in the cruise and superyacht manufacturing sectors, which has contributed to its current success. However, a potential weakness is that the industry's reliance on a few selected vessel types makes it susceptible to global structural changes in demand for these vessels. This highlights the need for some diversification to mitigate risks associated with fluctuating market demands.
Spain once had a very strong shipbuilding industry, but it has since declined somewhat. Unlike other peer countries, Spain did not adapt by shifting to vessel types with globally growing demand or by focusing on specific technologies or niche markets. As a result, the industry is now primarily producing fishing vessels for the domestic market, at least in the commercial vessel sector. This underscores the importance of actively focusing on and adapting vessel types to foster growth and recovery in the shipbuilding industry.
The UK experienced significant decline in (non-defence) production in the early 2000s, and production has since fluctuated at a relatively low level. One stand-out sub-sector is leisure, as yachts remain internationally competitive. However, broadly speaking this low level of production may both result from and reinforce declining production capabilities. Nonetheless, recent support measures point towards a strategy more in line with peer competitors: selectively developing specific sub-sectors, particularly through innovation support. One challenge the UK may face with this strategy is that it is a latecomer to these exact submarkets which other European countries have previously been proactively developing. Another is its negative reputation in select sub-sectors.
Norway
Norway has shown particular strengths in swiftly shifting between vessel types of interests to achieve targeted policy objectives – including Net Zero – and maintaining a mix of larger and smaller yards.
The industry
The Norwegian shipbuilding industry showed steady growth until 2009, with vessel completions measured in CGT peaking that year. Following the peak, diversity in production of vessel types decreased somewhat. Key vessel types have included offshore, cruise, and ferries.
A key submarket has been offshore vessels, associated with the strong performance of the global oil and gas market. Between 2006 and 2017, offshore service vessels accounted for 80% to 90% of Norway’s annual vessel completions. However, after the sharp decline in global oil prices in 2014, the Norwegian offshore market contracted significantly. This downturn severely impacted Norway’s shipbuilding industry, leading to a continuous decline in vessel completions until 2017 (Figure 3.4).
As offshore service vessel production declined, Norway re-diversified its production. This shift came from rapid increase in cruise and ferries completion. In particular, 2019 saw significant change, with cruise ships and ferries accounting for 82% of total completions, a remarkable growth from 5%-15% of total share before 2014. Notably, these completions in 2019 were ordered between 2016 and 2018, confirming that this shift occurred after – and likely as a response to, given the proactive policy measures put in place – the 2014 crash of oil prices. Although less prominent than cruise ships and ferries, fishing vessels also began to feature more in the portfolio of vessel completions from 2015, contributing to the diversification away from offshore vessels.
Despite such a shift, since 2019, the total number of vessel completions has gradually decreased again.
Note: This graph combines sea-going vessel from below 100 GT from Sea-web, with Clarksons World Fleet Register for sea-going vessel above 100 GT, excluding vessels built for the defence sector, not covered in Clarksons. The databases may not encompass all vessels worldwide, particularly those of a smaller size.
Source: OECD calculations based on World Fleet Register (Clarksons), and Sea-web, S&P Global, https://www.spglobal.com/market-intelligence/en/industries/maritime [Access: February 2025].
Exports and owner nationality
An export orientation emerged alongside the shift in production from offshore vessels to cruise and ferries.
Export data and vessel owner nationality provide important insights into the outward shift of Norway’s shipbuilding industry in recent years. Between 2006 and 2016, when offshore oil dominated Norwegian shipbuilding, exports were minimal and more oriented towards, e.g. offshore platforms than other vessel types (Figure 3.5).
Source: World Integrated Trade Solution(WITS), World Bank, https://wits.worldbank.org/WITS/WITS/Restricted/Login.aspx#collapseSummary [Access: February 2025]
This suggests that most vessels produced served the domestic offshore oil energy sector. This is supported by Figure 3.6, which shows the ratio of domestically owned offshore vessels which were also produced in Norway. The decline in this ratio correlates to the shift in regard to offshore oil around 2014.
Note: This graph includes sea-going vessel above 100 GT. This does not differentiate between structures and vessels for offshore oil versus those for offshore renewables.
Source: OECD calculations based on World Fleet Register (Clarksons).
After 2017, however, export values for cruise ships and ferries rose sharply, reflecting a growing reliance on these submarkets as outward-facing segments of the industry (Figure 3.5). This shift becomes even clearer when looking at nationality of ownership data. During the peak of offshore vessel production (2007 to 2016), approximately 50% to 80% of offshore vessels completed in Norway were delivered to domestic owners. In contrast, for cruise ships and passenger vessels produced between 2018 and 2023, —when these vessel types became the dominant products of Norwegian shipyards, —50% to 80% were built for foreign owners. This illustrates not only a clear shift in vessel types but also a broader transition towards export-oriented production (Figure 3.7).
Note: This graph includes sea-going vessel above 100 GT. This does not differentiate between structures and vessels for offshore oil versus those for offshore renewables.
Source: OECD calculations based on World Fleet Register (Clarksons).
This structural shift in Norway’s shipbuilding industry is closely tied to developments at Norway’s largest shipbuilding group, STX Europe (formerly Aker until 2007) (European Commission, 2008[1]). In 2013, STX Europe was acquired by the Italian shipbuilding giant Fincantieri (Fincantieri, 2023[2]). Before the acquisition, STX Europe had not built any cruise ships or ferries in Norway. After Fincantieri’s acquisition, however, the company – rebranded as VARD – emerged as the leading builder of cruise ships and passenger vessels in Norway (Clarkson Research, 2024[3]). In fact, the majority of cruise ships completed in Norway in recent years have come from VARD’s shipyards, underscoring the close link between foreign ownership, technological specialisation, and the growing export orientation of the Norwegian shipbuilding sector.1
Policy perspective: support measures and other policy approaches
Norway provides proactive financial support, particularly in the form of R&D grants and loans.
The contribution of the Norwegian Export Credit Agency, Eksfin, is particularly significant. In addition to export credit support, Eksfin also manages the Domestic Ship Guarantee Scheme. This scheme was introduced in 2018 with an exposure limit of NOK 10 billion (GBP 921 million) and has been extended until 2026. Eksfin can cover medium- to long-term loans to purchase or carry out major conversions of ships which are built wholly or partly at a shipyard in Norway and to be used in Norway. The maximum financial exposure at the end of 2023 amounts to NOK 1 276 million (GBP 97.2 million) (OECD, 2024[4]).
There are also relevant sub-sector-specific support measures for green vessels, offshore wind, and autonomous vessels.
For ‘greening’ of the fleet, under its action plan for green shipping – which aims to reduce emissions from domestic shipping and fishing vessels by half by 2030 (Ministry of Climate and Environment, 2019[5]) – Norway provided support through specific programmes such as risk loan schemes for short sea shipping and fishing vessels, and PILOT-E, a joint funding programme for innovation and commercialisation.
Norway has also rapidly strengthened its efforts in offshore wind development. In 2024, the Norwegian government proposed NOK 35 billion (GBP 2.55 billion) for a support scheme dedicated towards the first commercial floating offshore wind tender (offshoreWind,biz, 2024[6]). This demand-side policy instrument is likely to stimulate further production of offshore wind vessels.
Finally, financial support in combination with other non-financial instruments have been applied in the autonomous vessel sub-sector. In 2016, Norway launched the world’s first test bed for autonomous ships (Kongsberg, 2016[7]). The country has also established its own guidelines for autonomous vessels, in line with the policy objective of technological leadership in unmanned ships (Norwegian Maritime Authority, 2020[8]). In 2022, the Yara Birkeland, widely regarded as the world’s first autonomous ship, entered commercial operation (YARA, 2025[9]).
Key takeaways
The Norwegian shipbuilding industry has demonstrated resilience by swiftly transitioning to the production of cruise ships and ferries in response to the structural and global decline in demand for offshore oil vessels, which were previously their mainstay. However, it has not been sufficient to fully restore production to previous output levels. Moving forward, technological specialisation and a focus on emerging technologies, such as alternative fuels and automation, will be essential strategies for the industry to remain competitive and meet future market demands.
The Netherlands
The Netherlands has exhibited particular strengths in high-end technology and customisability in vessel design and production.
The industry
The Dutch shipbuilding industry experienced a gradual decline in vessel completions from 2000 to 2019, followed by a modest recovery in recent years. This decline can be partially attributed to decreased production of multipurpose vessels (MPPs) and oil offshore vessels, both of which had traditionally been important products for Dutch shipyards (Figure 3.8).
The drop in MPP orders stemmed from reduced demand from German and Dutch owners—the main historical buyers of Dutch-built MPPs. This decline reflects broader market shifts, including in response to the 2008–2009 financial crisis which triggered a slowdown in industrial trade and commodity flows, reducing the demand for MPPs. This trend was aggravated with falling charter rates, leaving shipowners with little incentive to order new MPPs (DNV, 2018[10]). The collapse in oil prices after 2014 also lowered demand for MPPs used in offshore-related cargo transport, including the movement of drilling equipment and oilfield supplies.
Since 2020, Dutch shipbuilding has shown signs of recovery, driven by steady output in specialised, high-value segments such as superyachts, dredgers, and (custom) general cargo. Dutch shipyards have increasingly focused on complex, technology-intensive vessels—leveraging their reputation for producing high-quality vessels in a timely manner (OECD, 2020[11]).
Note: This graph combines sea-going vessel from below 100 GT from Sea-web, with World Fleet Register for sea-going vessel above 100 GT. The databases may not encompass all vessels worldwide, particularly those of a smaller size.
Source: OECD calculations based on World Fleet Register (Clarksons), and Sea-web (S&P).
Dutch dredgers are internationally competitive due to the country’s leadership in innovative, sustainable technology. Companies such as Royal IHC, Van Oord, and Boskalis have introduced advanced solutions, including LNG-powered dredgers, deep dredging systems, and biofuels derived from waste streams, helping meet tightening environmental regulations. Dutch shipyards also benefit from public sector support, notably through the Ecoshape Consortium, which is backed by the Dutch Ministry of Infrastructure and Water Management and promotes the "Building with Nature" approach – the integration of natural processes into dredging projects. This combination of innovation and environmental leadership has helped Dutch dredgers maintain their appeal despite cost competition from Chinese yards (Van den Ende and Tarakci, 2018[12]).
Similarly, the Netherlands has curated a reputation for high quality, timely delivery, and customisability in superyachts. Dutch shipyards benefit from a tightly connected ecosystem of suppliers, engineers, and designers, often referred to as "Yacht Valley," which supports the production of fully bespoke vessels (New Zealand Foreign Affairs & Trade, 2023[13]).
By shifting towards niche markets and diversifying away from conventional MPVs, Dutch shipbuilders have adapted to changing global demand patterns. This strategic focus on high-value, custom vessels has likely supported the sector’s gradual recovery.
Exports and owner nationality
There is an increasing export orientation of the Dutch shipbuilding industry, particularly in segments where the Netherlands holds strong global competitiveness: dredgers and superyachts.
Historically, general cargo vessels built in the Netherlands primarily served domestic demand, but in recent years, more foreign owners have entered the order books. This is particularly true for dredgers, where two-thirds of vessels completed between 2000 and 2024 were for foreign owners (Clarkson Research, 2024[3]).
Similarly, superyacht production is widely export-oriented. Recent trends show rising demand from younger, tech-oriented billionaires who want larger, technologically advanced yachts, including those equipped with sustainable propulsion and lightweight materials to improve efficiency. The combination of strong brand value, technological innovation, and environmental adaptation positions the Netherlands as a preferred source for both high-spec dredgers and luxury superyachts in the global market (Figure 3.9).
Note: Superyachts are included under the category of motorboats.
Source: World Integrated Trade Solution (World Bank).
Policy perspective: support measures and other policy approaches
In 2015, the government developed the Dutch Maritime Strategy 2015-2025 in co-operation with the maritime sector. It has aimed to address industry interconnections and societal trends. Key initiatives include establishing a Maritime Learning and Development Centre (MLDC), promoting exports, and supporting research, development, and innovation (RDI) (OECD, 2020[11]).
Another mechanism for promoting co-ordination is SMASH!, a public-private partnership forum for smart shipping composed of companies, government actors, and knowledge institutions. The forum acts to promote multilevel governance and regional interconnectivity (SMASH!, 2021[14]).
The Dutch government plays a supportive role in fostering innovation within the shipbuilding sector, particularly in areas where the industry holds technological leadership. One notable example is the Ecoshape Consortium, supported by the Ministry of Infrastructure and Water Management. This consortium focuses on advancing knowledge and technology for the ‘Building with Nature approach,’ which integrates natural processes into hydraulic engineering and dredging projects. Such public support for innovation helps Dutch shipyards maintain their competitive edge in environmentally sustainable dredging solutions, reinforcing the strong global reputation of the Dutch dredger industry (Van den Ende and Tarakci, 2018[12]).
Relatedly, great emphasis has been placed on sustainability in shipbuilding and shipping. ‘Subsidy for Sustainable Shipbuilding’ is a scheme to encourage innovations for the construction or conversion of inland vessels, ocean-going vessels and offshore structures. The focus is on new, experimental technologies in the areas of sustainability, emission reduction, alternative fuels and noise reduction. The budget was EUR 2.3 million in 2023 (EGEN, 2021[15]). Similarly, under the Subsidy Scheme for the Electrification of Inland Navigation Vessels, the Dutch government has made available a sum of EUR 15.1 million in 2024 and 2025 for the construction and conversion of inland navigation vessels capable of fully electric operation. The aim of this scheme is to grant subsidies for a ship to an electric propulsion line (EICB, n.d.[16]).
Key takeaways
The Dutch shipbuilding industry experienced a decline in vessel completions from 2000 to 2019. However, since 2020, the industry has shown signs of recovery, driven by steady output in specialised, high-value segments such as superyachts, dredgers, and custom cargo vessels. Dutch shipyards have increasingly focused on complex, technology-intensive vessels, leveraging their reputation for innovation and sustainability.
Additionally, the Dutch government has played a supportive role in fostering innovation and sustainability within the sector, through schemes like the Subsidy for Sustainable Shipbuilding and the Subsidy Scheme for the Electrification of Inland Navigation Vessels. This demonstrates how focusing on niche markets, leveraging the country's innovation capacity, and receiving targeted government support can yield significant results.
Italy
In its progressive position in the cruise submarket, in addition to export-oriented leisure, Italy is a good example for targeted specialisation as well as greening of vessels.
The industry
Generally, the Italian shipbuilding industry has maintained its strong position through a strong domestic supply chain that involves a network of specialised local enterprises. This has not only supported technological advancements but also contributed to employment and economic stability (OECD, 2024[17]).
Production peaked in the late 2000s, then declined sharply (Figure 3.10). The industry began recovering in 2016, though the number of vessels completed did not increase significantly, suggesting a shift toward the construction of larger, more complex ships (Clarkson Research, 2024[3]). A brief decline occurred during the COVID-19 pandemic, particularly in the cruise ship sector, but Italian shipbuilders successfully mitigated order cancellations through negotiated postponements (OECD, 2024[17]).
Note: This graph combines sea-going vessel from below 100 GT from Sea-web, with World Fleet Register for sea-going vessel above 100 GT. The databases may not encompass all vessels worldwide, particularly those of a smaller size.
Source: OECD calculations based on World Fleet Register (Clarksons), and Sea-web (S&P).
Italy is a global leader in cruise ship construction, and despite the downturn between 2013 and 2015, cruise ship output has since rebounded, reaffirming its strength within the Italian shipbuilding sector. In addition to cruise ships, Italy also produces ferries, though this segment has become increasingly marginal. Since 2011, Fincantieri, the country’s largest shipbuilder, has built only one ferry in Italy. Smaller shipyards, such as Cantiere Navale Visentini, have continued ferry production on a limited scale.
A defining feature of the Italian shipbuilding industry is its increasing specialisation. The industry has proactively focused on high-value, complex ships – namely cruise ships and yachts. This has reinforced its global competitiveness, particularly in the luxury and passenger vessel markets.
Exports and owner nationality
Italy’s shipbuilding industry, particularly its export performance, reflects the country’s global leadership in cruise ship construction. Since 2016, Italian cruise ship exports have grown steadily, closely following the recovery in cruise ship completions after the 2013-2015 downturn. Cruise ships produced in Italy are overwhelmingly destined for foreign operators, with more than 90% of cruise vessels completed between 2000 and 2024 delivered to international owners. This highlights the strong export orientation of Italy’s cruise ship sector.
Yachts – classified as motorboats in the trade data below (Figure 3.11) – also comprise a major export product of Italy. 90% of the domestically produced boats (including sailboats) are exported, with 40% of export within the EU and 60% outside of the EU, namely North America. Italy is a top exporter of boats with inboard motors, with 26% of global market share (Confindustria Nautica Statistics Department, 2024[18]).
Source: World Integrated Trade Solution (World Bank)
However, the export orientation is much less pronounced for ferries. As seen in Figure 3.12 and Figure 3.13, before the financial crisis ferries built in Italy were primarily for domestic demand. This difference in market orientation likely influenced strategic decisions within the industry, particularly for Fincantieri. As Italy’s domestic economy faced challenges around 2011, including weaker public and private sector purchasing power, the demand for domestically built ferries may have declined. In response, Fincantieri shifted its focus toward the more lucrative and stable global cruise market, where international demand remained strong. This shift underscores how Italy’s shipbuilding industry—much like those in other European countries—has increasingly prioritised high-value, export-oriented production to maintain its competitiveness and economic resilience.
Note: This graph includes sea-going vessel above 100 GT.
Source: OECD calculations based on World Fleet Register (Clarksons).
Note: This graph includes sea-going vessel above 100 GT.
Source: OECD calculations based on World Fleet Register (Clarksons).
Policy perspective: support measures and other policy approaches
In the twentieth century, during the 1980s and 1990s, the Italian government promulgated a number of specific laws to intervene in the shipbuilding sector which were mainly oriented towards the restructuring of shipyards. Following the establishment of the European Union and the adoption of the euro, Italian legislation was brought in line with European rules, notably state aid rules, which prevent market-distorting policy interventions (OECD, 2024[17]).
The Italian government has been making an effort to improve transparency on government support. In 2017, Italy published legislation which requires all companies receiving, “grants, subsidies, advantages, contributions or aid, in cash or in-kind, which do not have any reciprocal, remunerative, or compensatory nature” to publish the amounts they obtained from Italian authorities in the preceding year in the supplementary notes of their financial statements and any other consolidated financial statements (OECD, 2024[17]).
Next, as a measure to contribute to the achievement of the objectives of the European Green Deal and Fit for 55 package, the Italian government launched a scheme to give direct grants to shipping companies registered in Italy to acquire clean and zero-emission vessels, as well as to retrofit the vessels. The budget of the scheme amounts to EUR 500 million (GBP 420 million) for the period 2021-2026 (European Commission, 2022[19]).
Finally, in support of its strong marine tourism industry, local government often support this industry through packaged support measures for multiple co-located sectors. For example, the ‘Marina Arcipelago Toscano di Piombino’ project aims to transform an abandoned area into an eco-friendly nautical reception centre, co-financed by the Tuscany Region and the Regional Programme Fund. It will provide spaces for boat berths, dry ports, and facilities for marine tourism, water sports, local leisure, and shipyards (Marina World, n.d.[20]).
Key takeaways
The Italian shipbuilding industry has maintained a strong position throughout the observation period and has recovered well from the decline experienced between 2011 and 2015. This recovery can be attributed to the industry's ability to leverage its renowned name and strong position in the cruise and superyacht manufacturing sectors, which has contributed to its current success. However, a potential weakness is that the industry's reliance on a few selected vessel types makes it susceptible to global structural changes in demand for these vessels. This highlights the need for some diversification to mitigate risks associated with fluctuating market demands.
Spain
Though it still has some leading firms and solid production of fishing vessels, overall Spain has experienced a decline in market volume.
The industry
The Spanish shipbuilding industry has experienced a continuous decline since 2000, with a brief period of recovery between 2007 and 2011 (Figure 3.14). During this short rebound, offshore vessel production increased slightly, helping to stabilise the sector temporarily. However, the overall trend of contraction implies a decreasing competitiveness.
The most visible sign of this loss of competitiveness is the sharp decline in tanker production after 2004. Tankers once formed a substantial part of Spain’s shipbuilding portfolio, and their decline significantly reduced overall vessel completions. After 2014, when the global offshore market also contracted, the Spanish industry became increasingly reliant on fishing vessels, which have remained the primary type of merchant vessel produced.
Note: This graph combines sea-going vessel from below 100 GT from Sea-web, with World Fleet Register for sea-going vessel above 100 GT. The databases may not encompass all vessels worldwide, particularly those of a smaller size.
Source: OECD calculations based on World Fleet Register (Clarksons), and Sea-web (S&P).
It is important to note that these figures exclude naval vessels, as the data focuses only on merchant and commercial shipbuilding. Navantia, Spain’s largest shipbuilder, is a state-owned enterprise primarily focused on naval shipbuilding and defence projects, meaning its core business falls outside the scope of this analysis.
Exports and owner nationality
The Spanish shipbuilding industry has historically been outward-oriented, with exports playing a central role. Between 2000 and 2023, the weighted average share of vessels built for Spanish owners was approximately 27%, meaning around 73% of vessels completed in Spain were for foreign operators. This indicates that foreign demand has traditionally been essential to the industry’s survival.
However, in recent years, the product mix of Spanish shipbuilding has shifted heavily toward fishing vessels and fish farm support vessels, and this shift has been associated with a change in customer base. In these segments, domestic demand dominates approximately 90% of fishing vessels and 67% of fish farm support vessels completed in Spain were delivered to Spanish owners. However, interestingly, export trade value data reveals that fishing vessels are still the most prominent product Spain exports in the shipbuilding sector (Figure 3.15). This highlights that Spain’s fishing vessel sector does retain some export relevance, but the vessels exported are generally smaller, lower-value ships compared to the larger and more complex vessels once produced for foreign markets. In fact, compared to Italy and other peer countries, the scale of fishing vessel exports is still small.
Motorboats are also a main export product from Spanish shipbuilding industry, with trade value rapidly increasing in recent years. In 2023, Spain ranked 9th in global inboard boats export with 2% of global market share (Confindustria Nautica Statistics Department, 2024[18]).
Source: World Integrated Trade Solution (World Bank)
Policy perspective: support measures and other policy approaches
Despite an overall decline, the Spanish government has still included support for shipbuilding in broader policy strategies.
In 2021, Spain launched Proyecto Estratégico para la Recuperación y Transformación Económica (Strategic projects for economic recovery and transformation, PERTE). PERTE is a strategic mission with a great capacity to boost economic growth, employment and the competitiveness of the Spanish economy, with a high level of public-private collaboration and application to the different administrations (Spanish Government, 2021[21]).
PERTE contains 12 strategic projects, including on the shipbuilding industry. This project aims to diversify the naval sector towards new products, promote digitalisation, and improve environmental sustainability and skilled labour.
A total investment of EUR 1 460 million (GBP 1 255 million) is planned, with a public contribution of EUR 310 million (GBP 267 million) and an estimated EUR 1 150 million (GBP 989 million) of private investment. An investment is aiming line will be launched for the modernisation and diversification of the sector and another dedicated to naval application technologies (Spanish Government, 2022[22]).
Key takeaways
Spain once had a very strong shipbuilding industry, but it has since declined somewhat. Unlike other peer countries, Spain did not adapt by shifting to vessel types with globally growing demand or by focusing on specific technologies or niche markets. As a result, the industry is now primarily producing fishing vessels for the domestic market, at least in the commercial vessel sector. This underscores the importance of actively focusing on and adapting vessel types to foster growth and recovery in the shipbuilding industry. Additionally, it highlights the potential role of government guidance in steering the market towards more promising directions.
The UK
Outside of defence shipbuilding, the industry is comprised of a combination of aging shipyards, select successful start-ups, and firms that have become somewhat self-conscious in respect to their advanced manufacturing neighbours and foreign peers. Yet, there are key submarkets and existing strengths for realising current and future opportunities.
The industry
The UK shipbuilding industry has undergone significant transformation since the early 2000s, with a clear reduction in commercial vessel completions after 2003 (Figure 3.16). This trend reflects broader shifts in the global shipbuilding landscape, where competition from cost-effective East Asian yards has intensified – a challenge also seen across the other European countries profiled above.
Note: This graph combines sea-going vessel from below 100 GT from Sea-web, with World Fleet Register for sea-going vessel above 100 GT. The databases may not encompass all vessels worldwide, particularly those of a smaller size.
Source: OECD calculations based on World Fleet Register (Clarksons), and Sea-web (S&P).
Output has largely consisted of offshore, leisure, ferry, and fishing vessels. Notably, offshore structures and vessels comprised a key portion of completions in the early 2000s before sharply declining and only reemerging in recent years. Yachts, in particular, have maintained steady output, reflecting the UK’s strong reputation for craftsmanship and customisation in the luxury leisure sub-sector.
It may be relevant to note that Figure 3.16 has weak representation for the smaller vessels, especially those below 100 GT. Within the submarkets highlighted as relative strengths, production of vessels below 100 GT may be more common and would therefore not be visible here. The export data below, which includes smaller vessels, suggests that certain strengths remain.
Also, as mentioned previously, the UK’s naval sector, championed by firms such as BAE Systems and Babcock, remains relatively stable through a combination of defence procurement and exports.
Exports and owner nationality
Generally, the industry has been relatively inward facing. Approximately 75% of the vessels completed between 2000 and 2024 (measured in CGT) were built for domestic owners. This indicates that much of the industry’s output serves the needs of the domestic market. Nonetheless, as shown further below in Section 5.4, even in key submarkets the UK is unable to consistently capture significant portions of the total domestic demand (Figure 3.17).
Note: This graph includes sea-going vessel above 100 GT.
Source: OECD calculations based on World Fleet Register (Clarksons).
Simultaneously trade value data—which also captures smaller vessels not always visible in completion databases—shows that the UK maintains strong global competitiveness in certain segments. The UK ranks 5th in the global inboard motorboat market, holding a 5.6% share. In the sailing boat and yacht segment, the UK performs particularly well, ranking first in the small vessel category (up to 7.5 meters in length) and fourth in the superyacht market (orderbook) (Confindustria Nautica Statistics Department, 2024[18]). The detail of the export of leisure boats is discussed in the key submarkets part.
Policy perspective: support measures and other policy approaches
The UK government has supported maritime sectors via at least an estimated GBP 257 million (see Table 3.1).
Note: The CMDC and Smart Shipping Acceleration Fund, amongst others, are situated under the UK SHORE programme.
A thorough examination of these policies in their totality reveals that the UK government is implementing R&D measures to foster innovation within the shipbuilding industry. Other peer countries are also following a similar trend, i.e. R&D supports. However, to compete with these countries, it may be necessary for the UK to provide more in-depth support. For instance, the implementation of policies that are more closely aligned with social implementation, such as the “Marine Supply Chain Accelerator”, may be pivotal in this regard.
The CMDC is a key supply-side stimulant to innovation for green maritime technology
55 projects assessed and identified by Innovate UK received GBP 23 million in the first round of the CMDC to support green innovation notably in the shipbuilding sector. The last call CMDC6 was launched in January 2025 allocating GBP 30 million, bringing the total funding of the CMDC to GBP 159 million. The funding of this programme comes from the UK Shipping Office for Reducing Emissions (UK SHORE) programme (Department for Transport and Innovate UK, 2021[24]).
There are two strands under the CMDC:
1. Feasibility studies for projects costing between GBP 25 000 to 1 million. Projects must review the technical and economic feasibility of technological solutions to reducing carbon emissions and develop a clear plan for future demonstration after the feasibility study has been completed.
2. Innovation projects costing between GBP 100 000 to 4 million. Projects must design, develop and then test a novel clean or smart maritime technology aiming to reduced carbon emissions, either from vessels, or from onshore infrastructures (Department for Transport and Innovate UK, 2021[24]).
Successes: These funds have notably been used to support start-ups which are now in various phases of commercialisation. This includes, e.g. Artemis Technologies and DRIFT.
Remaining challenges: one issue raised by stakeholders, even those who have overcome it, is that the innovation to commercialisation step remains distinctly formidable, even with the CMDC, and that the short funding periods of this programme can be limiting. This may be where reliance on supply chains exists or development may have multiple phases.
Opportunities in key submarkets’
Key submarkets were identified by where there is (1) an interest in maintaining existing strengths, and/or (2) high growth potential due to global or domestic incoming geopolitical or economic shifts. The analysis identified ferries, leisure boats and offshore support vessels as key submarkets.
Key submarkets: a snapshot
Ferries. There is significant demand-side and supply-side opportunity to combine replacement of the aging public ferry fleet with even greater support for transforming innovation capabilities into production capabilities in the green vessel sub-sector.
The public ferry fleet is aging and needs to be replaced.
The domestic sub-sector for non-green ferries is characterised by lagging production capabilities and lingering effects of previous failures. Global competitiveness is negligible and public procurement bids often go abroad because of a face-value costing differences.
The UK has strengths in green innovation but the innovation to commercialisation step is a challenge. Still, there is preliminary momentum in domestic green ferry or other vessel production. Some select start-ups focused on high-tech green vessels, including a ferry, have successfully commercialised through a combination of public and private investment. Delivery of initial builds in the coming year may set the tone for other entrants.
Norway’s proactive transition to a green ferry fleet can serve as a successful example.
Leisure vessels. The supply-side opportunity is that this sub-sector has a relatively strong position globally which could be further developed and used for resilience in the sector.
The demand for leisure vessels (as a luxury good) may be treated as relatively stable under current circumstances.
The leisure sub-sector highlights the benefits of co-location with related sectors and sub-sectors in industry clusters, within the UK but especially within Italy and the Netherlands, who both outperform the UK. Policy focused on place-based and cluster-wide impacts may be a factor of success for these key competitors.
Other factors of success may be technological capabilities, skilled labour, and availability of key input materials.
Offshore wind vessels. There is a significant demand-side opportunity in the nascent offshore wind vessel submarket, domestically and abroad. Existing strengths in design and innovation would need to be transformed into robust production capabilities.
The market for offshore wind development is growing, implying relatively certain demand in offshore wind vessels.
While the UK has a relatively strong position in terms of ownership of these vessels, production is disproportionately smaller – absent for SOVs and CSOVs.
An appropriate peer country to compare is Norway, which has significant positions in both ownership and production. While both Norway and the UK have design strengths, Norway far out-paces the UK in terms of its production capabilities for these vessels.
Design and innovation strengths exist in the form of globally competitive firms and existing support measures, and some high-tech capabilities exist within the leisure sub-sector as well as through recent start-ups originating out of support schemes.
Additionally, emerging submarkets and innovation were investigated.
Innovation and emerging technology: a snapshot
The United Kingdom may have strengths in both the design of made-to-order products as well as in development of new products or technology in this field. Empirical evidence on design as a service sub-sector is highly limited but the success of various firms providing this service warrants further investigation. Support for innovation, particularly in green maritime technology, is relatively robust.
Two emerging sub-sectors offer opportunities in UK shipbuilding. Innovation capabilities in green technologies and autonomy have proven to be relatively competitive globally, and there are success stories of select start-ups, but the innovation to commercialisation step remains a challenge.
Green vessels. Shipbuilding and shipping are moving towards maritime decarbonisation. Greening vessels includes the development and adoption of various technological applications which could be applied across existing sub-sectors (vessel types). The relatively nascent market offers opportunities for first mover advantages. Though domestic production of green vessels is lagging, the UK has existing strengths in the innovation of new green maritime technology. Because the transition is one which may occur across sub-sectors, strengths in green vessel production may help reverse the decline in production capabilities.
Autonomous vessels. The autonomous vessel submarket is still nascent but can be expected to grow rapidly in the near future. The United Kingdom has a strong position in innovation and investment. Through a mission-oriented strategy, Korea is a prime competitor in this sub-sector, with well-co-ordinated investment, regulation, and dependable policy outlooks.
Key takeaways
Since a significant decline in the early 2000s, production of (non-defence) vessels in the UK has fluctuated at a relatively low level. One stand-out sub-sector is leisure, as yachts remain internationally competitive. However, broadly speaking this low level of production may both result from and reinforce declining production capabilities. Nonetheless, recent support measures point towards a strategy more in line with peer competitors: selectively developing specific sub-sectors, particularly through innovation support. One challenge the UK may face with this strategy is that it is a latecomer to these exact submarkets which other European countries have previously been proactively developing. Another is its negative reputation in select sub-sectors.
Global shipbuilding production has grown and shifted in nature and location.
Across the board, resilience among peer shipbuilding economies tends to exist alongside specialisation into high-value segments and export orientation, as well as a positive reputation.
The Norwegian industry has focused on cruise ships and ferries;
the Dutch industry recovered through innovation and high-tech high-quality vessels; and
the Italian industry strengthened the reliance on its strong position in cruise and superyacht manufacturing.
In contrast, Spain's industry has struggled due to a lack of adaptation.
This suggests that for the UK, concentrating on established niche markets, along with emerging vessel types and technologies, may be essential.
However, two cautionary considerations exist. First, while this strategy appears to be associated with resilience, reflected in these countries maintaining a core share of key sub-markets, it has not been consistently linked to sustained long-term growth. Second, the industry may be entering a period of rapid technological change. Strategies that were sufficient in the past may prove inadequate as technological gaps between countries continue to widen.
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← 1. The value added and output used in STAN and UNIDO concerns the economic activity conducted within the border, regardless of the nationality of the economic entity. The aggregate of value added of each industry forms GDP. Therefore, the nationality of the company does not affect the GDP as long as the economic activity is conducted within the border.