The persistent manpower shortage in South Korea’s shipbuilding industry is gradually being addressed, leading to an acceleration in ship construction. Compared to last year, about 36% more ships are being built monthly. The increase is attributed to the government’s easing of domestic employment conditions for foreign workers, indicating that ship construction rates are expected to rise even further.
According to Clarksons Research, a U.K.-based maritime and shipbuilding market analysis firm, the average monthly shipbuilding volume of South Korean shipyards in the third quarter of this year was recorded at 776,000 Compensated Gross Tonnage (CGT). This is a 17.7% increase from the second quarter’s average volume of 659,000 CGT.
The growth is even more pronounced compared to last year. The average monthly shipbuilding volume for the third quarter of last year was 570,000 CGT. This means that this year, on average, 36.1% more ships were constructed monthly compared to last year.
The momentum in the shipbuilding process is a result of gradually overcoming the longstanding manpower shortage in the shipbuilding industry. Data from the Ministry of Trade, Industry and Energy and the Ministry of Justice indicate that in the first half of this year, 11,104 foreign skilled and low-skilled workers were deployed in the shipbuilding industry. This accounts for about 70% of the estimated annual manpower shortage of over 14,000 individuals.
The workforce in domestic shipyards has also increased. In the third quarter of last year, HD Hyundai Heavy Industries had a staff of 12,715, which increased to 12,897 in the second quarter of this year. Over the same period, Samsung Heavy Industries also saw a growth from 8,936 to 9,349 employees.
With the effective deployment of manpower, shipyards are also witnessing an increase in their average operational rates. The operational rate for HD Hyundai Heavy Industries, which was at 63.2% in the third quarter of last year, has risen to 79.9% in this year’s third quarter.
Furthermore, next year is expected to see an even larger influx of foreign labor into the shipbuilding sector. The government plans to expand the specialized training program for unskilled foreign workers, which is currently in operation this year, to 4,000 individuals next year. By the end of this year, the training program aims to produce around 500 specialized unskilled foreign workers, aiming for almost an eightfold increase next year.
A representative from the shipbuilding industry stated, “In addition to the integration of foreign workers, influences such as the development of robotic technologies and the establishment of smart shipyards are playing pivotal roles in addressing the manpower issue in shipyards.”