estim ated in grt, of the w orld shipbuilding industry. The figures appearing in Table B are com m ented as follows:
a) In order to evaluate the evolution of production capacity in the main ship building areas, the W orking G roup has first calculated the probable level of deliveries to be expected in 1971 in each of them. Besides, it tried to appraise the effects of factors liable to bring about an increase or a reduction of the present capacity, taking into account the investm ent plans inventoried on one hand, and the possible effect of recent changes in the newbuilding m arket situation on the other.
b) It can be noted that the level of activities now reached by the shipbuilding industry is exactly the average level forecast for the whole 1970 -1 9 8 0 period in the high estim ate of the overall approach. A lthough m any shipyards m ay be considered to have now reached a stage of “over-em ploym en t” of the existing facilities, it can be feared that the advance gained in the past years with respect to requirem ents should be offset, in the m edium term, by a reduction of yearly deliveries below the level corresponding to the correct use of the present equip m ent and labour force.
c) A s regards the evolution forecasts for the w orld shipbuilding theoretical pro duction capacities, there is still a quite m arked trend tow ard their growth, in spite of the high deceleration rate which has been adm itted after taking the decreasing factors into consideration: the prevailing growth rate of 1 2 % p.a. should be dimin ishing after 1972, but the present impulse is so pow erful that, tow ard the m iddle of this decade, the theoretical production capacity of the industry w ill m ost probably reach a level which m ake possible newbuilding deliveries amounting to about 32 million grt, of which som e 30 from the shipyards now operating on the international market.
If we situate this forecast in the calendar year 1975 and if w e refer to the average deliveries of the 196 0 -1 9 7 0 period centered on the year 1965, w e find that the long-term trend of the theoretical production capacity show s an average annual growth rate exceeding 1 0 % whereas the maximum growth rate corresponding to newbuilding requirem ents has been previously estim ated at 6 .3 % , also consider ing the long-term trend determ ined in the high estim ate of the overall approach. W e should rem em ber in this respect that the latter m akes it possible to anticipate that the annual newbuilding requirem ents will not reach the level of 30 million grt before the end of this decade.
d) The W orking Group wishes, in particular, to stress the fact that the advance gained by Japanese shipbuilders over their European com petitors in the im ple m entation of m ajor investm ent plans inevitably im plies that the growth of the Japanese production capacities can only be carried into effect through heavy dismantlings of old facilities; the average Japanese shipbuilding productivity should thus increase in the com ing years.
Contrarily, for the European traditional m aritim e countries, the inversion of the m arket situation m ay bring about the abandonm ent of investm ent program m es that w ould have been, however, absolutely necessary to enable the yards’ activity to be maintained in proper conditions of productivity so that it m ight be capable of withstanding the international com petition which is likely to becom e keener again.
This situation m ay aggravate the distortions which already exist, to the detrim ent of the European shipbuilding industry, in the com petition opposing it, on a w orld w ide basis, to its Japanese counterparts. It is therefore essential that the m odern ization of facilities in European shipyards should be continued, even if such a policy im plies a certain increase of capacity that it w ould seem advisable, at first sight, to avoid as far as possible.
Though it is not appropriate to attach too much im portance to the very figures of newbuilding capacity and requirem ent overall forecasts expressed in term s of grt (considering the sensibility of this unit to the ship size and type distribution in the shipyards’ production), it seem s that, despite the very noticeable rise in require m ent forecasts, the risks of overcapacity referred to in the 19 6 9 report have been growing since then.
It is the prevailing multiplication of investm ents in the w orld shipbuilding industry, and especially in Japan and Southern Europe, which, beyond the short-term fluctuations creates the threat of a structural disequilibrium which m ight continue through m ost of this decade if strict measures are not adopted in the m eantim e, on a w orldw ide basis, to reorganize the market.
The study of such measures exceeds the present term s of reference of our working group. H ow ever, it presupposes that the revision of the 1 9 6 9 report should be continued and deepened in the field of the sectorial analysis.
This revision will at first deal with large units, tankers, ore carriers and com bined vessels, such sectors in which the data already gathered tend to situate m ore particularly the excess production capacities, considering the orientation given to the investm ent program m es now being carried into effect.
T A B L E A