The German Shipbuilding and Ocean Industries Association (VSM) has presented its latest annual report. The document paints a multi-layered picture of an industry that is dealing simultaneously with record order books and increasing competitive pressure.
The global order backlog reached a historic level at the end of 2025: according to the Hamburg-based association, 6,577 ships with a total value of around $567 billion were on the books of shipyards worldwide. On a tonnage basis, this corresponds to more than 180 million CGT, more than double the figure of 86 million CGT at the end of 2019. Demand for newbuildings thus remains robust despite a year-on-year decline in investment. Global investment in new construction fell by around 21% to $181 billion in 2025 compared to the all-time high of more than $230 billion in the previous year, but remains at an exceptionally high level with the second-highest figure since 2008.
China remains the undisputed global market leader: Chinese shipyards accounted for almost 52% of all deliveries in 2025, with a total of around 44 million CGT delivered there – another record year. Remarkably, Chinese shipyards recorded a significant decline in incoming orders for the first time in five years (-35%), with their global market share falling from 70% to just over 63%. Whether this is a structural trend reversal or just a snapshot remains to be seen. If the current forecast comes true, China’s share of deliveries would rise to around 61% by 2027 – at the expense of all other shipbuilding regions. Meanwhile, Europe is maintaining its niche position: although European shipyards only account for 6.5% of all ship orders, they represent almost 15% of the global order value.
US shipbuilding hype boosts share prices
The politically driven shipbuilding boom in the USA was a key topic in the reporting year. The Trump administration responded to China’s maritime dominance with an executive order from April 2025 and the so-called “Maritime Action Plan”. The plans to rebuild the US merchant fleet – known internally as “MASGA” (“Make American Shipbuilding Great Again”) – resulted in massive investment announcements from South Korea, Japan and a few European shipyards. The reaction of the stock markets was clear: the share price of Huntington Ingalls Industries rose by 56% in 2025, Fincantieri gained up to 155% and South Korean shipyards such as Hanwha Ocean even achieved share price gains of up to 200%. For the VSM, the US hype is a signal that the capital markets have enormous confidence in the medium-term development of global shipbuilding.
Passenger shipbuilding sets new record – Meyer Werft and MSC with major deal
The ferries and passenger ships segment saw particularly dynamic growth in 2025. Investments rose to more than $36 billion – an increase of almost 80% compared to the previous year and a historic record. This is around one fifth of all newbuilding investments worldwide. The report cites the letter of intent between Meyer Werft and MSC Cruises for the construction of four cruise ships, with options for two more units, announced at the end of 2025 as a concrete example of continuing strong demand for cruises. The share prices of the major cruise lines also reflect the optimism: Royal Caribbean Group rose 39% in 2025, Carnival Corporation & plc gained 25% and Viking Holdings climbed as much as 54%.
Naval shipbuilding under pressure
More than one third of the entire German shipbuilding industry’s turnover is now generated by naval projects. The broad portfolio ranges from submarines and frigates to mine countermeasures vessels and autonomous systems. Nonetheless, there are concerns about current major projects.
The F126-class frigate, originally planned for 2028, will not be delivered until 2031 at the earliest, possibly under different ownership of the general contractor. The Federal Ministry of Defence (BMVg) is pursuing an alternative path in parallel and has concluded a preliminary contract for at least four “MEKO A-200 DEU” class frigates, with the first unit possibly arriving at the end of 2029. A final decision had not yet been made at the time of reporting.
The situation looks more positive for the submarine programme: the “212CD” class is being built for the German Navy and Norway, with six boats each, and is to be delivered from 2029 (Norway) and 2032 (Germany) respectively. The new “127” class air defence frigate, intended to defend against ballistic and hypersonic threats, is to be approved by the Budget Committee in 2026 with up to eight units; the first unit is not expected before 2033/2034.
In this context, the VSM criticises the fact that a number of smaller boat projects for the navy and special forces are to be outsourced entirely abroad – even though German industry could manufacture or build all of these types under licence.
New political foundation – EMIS as a turning point in Brussels
Politically, the reporting year marks a turning point. With the appointment of Christoph Ploß as Maritime Coordinator, the new German government under Friedrich Merz signalled early on that it sees shipbuilding as a key strategic sector. The first successes are already visible, according to VSM President Harald Fassmer in the foreword: the opening of the large guarantee programme for shipbuilding and offshore wind projects is seen as an important step. Shipyards can now apply for guarantees from €20 million, secured up to 80% by the federal and state governments.
At European level, the VSM sees the European Maritime Industrial Strategy (EMIS), presented by the European Commission in March 2026, as a turning point in industrial policy. After more than a decade in which Brussels’ involvement was limited to emissions targets and research funding, the strategy is now expected to provide concrete answers for the first time to China’s aggressive competition and US protectionism. The implementation of the EMIS measures is the focus for 2026 – the VSM warns that strategy papers must now become real projects.
Offshore wind: the thread has broken
The VSM report paints a rather sobering picture of offshore wind expansion: only 0.73 GW of new offshore wind capacity was installed in Germany in 2024, with total installed capacity rising to 9.2 GW. The targets are 30 GW by 2030 and 70 GW by 2045. The VSM openly states that the current pace of expansion is insufficient. A large amount of industrial capacity has already migrated to China; orders for the most recently tendered converter platforms have gone to China and Spain. A lack of planning certainty, discontinuities and excessively slow approval procedures are cited as the main reasons. The association also sees an urgent need for action regarding the financing framework for converter platforms, some of which are worth more than €2 billion.
Inland shipping: turnaround after several weak years
After several weak years, inland waterway shipbuilding is reporting clearly positive signals again for the first time. The number of delivered newbuildings rose to 35 units in 2025 (2024: 28), while order volume doubled from €58 million to €144 million. Incoming orders were even more dynamic, climbing to 49 ships with a volume of €561 million, compared to €78 million in 2024. The total order backlog of the approximately 40 German inland shipyards with around 2,000 employees grew to 82 units with a value of €926 million. The VSM sees increasing climate protection requirements and operators’ willingness to renew fleets as the drivers behind this recovery.
However, the VSM Annual Report 2025/26 does not stop at an industry balance sheet. It is also formulated as an industrial policy warning. From the association’s perspective, key instruments such as EMIS, the large guarantee programme and the role of the Maritime Coordinator are now in place. The decisive factor, however, will be whether they actually lead to newbuilding programmes, investments and reliable framework conditions for shipyards and operators. The core message: strategic autonomy in the maritime sector is not decided by strategy papers, but by concrete orders. Accordingly, association president Harald Fassmer calls for announcements to be turned into investments and political concepts into real projects.
