Outcome 2 - cycles

Question 1

Short summary of cycles

Answer 1

There have been 12 separate cycles with an average length of 9.6 years from peak to peak, with very wide spread from 5 years to 25 years. Average reduction from peak to trough was 52%. Cycles are part of the mechanism for adjusting shipbuilding capacity to changing needs of world trade

Question 2

Discuss first period of change

Answer 2

1. 1886-1919
   * Period of cyclical growth with output increasing with each peak
   * Rapid technological change with steel hulls

Question 3

Discuss second period of change

Answer 3

2. 1920-1940
   * Persistent problems dominated by 1931 depression
   * Started with overcapacity due to wartime expansion, combined with volatile trade, led to slumps with periods of moderate improvement

Question 4

Discuss third period of change

Answer 4

3. 1945-1973
   * Exceptional growth from 1963 onwards as Japan and Europe modernised bringing unprecedented expansion of shipbuilding capacity

Question 5

Discuss fourth period of change

Answer 5

4. 1973-1987
   * Grim period
   * Trade sluggish, volatile, slow technological change
   * Overcapacity increased when S Korea entered market
   * Employment in shipbuilding halved and many yards closed

Question 6

Discuss fifth period of change

Answer 6

5. 1987-2007
   * Dramatic revival due to expansion of Asia and replacement of 70s boom