According to the latest report from the Association of Singapore Marine Industries, Singaporean shipyards secured only S$820m worth of new orders in 2016, drastically declining from the S$4.9b orders recorded in the previous year.
ASMI president Chua San Lye explained that the dearth in new orders from offshore firms could be attributed to the reduced exploration and production (E&P) and drilling activities. Along with the weak utilisation of existing operating rigs and the supply overhang of newbuilds still under construction has led to the disappointing bookings of the city-state's shipyards.
"Major shipyards had received requests for deferred delivery of projects or experienced customers undergoing a major restructuring,'' Lye shared as he reported the marine sector's performance for the past year.
For the whole year, the industry's total order book clocked in at S$8b, a 57.9% decline from the previous year's S$19b. The total order book consisted of backlog orders secured in the earlier years with completion and delivery schedules extending into 2021.
The report also revealed that the total labour force for the offshore and marine industry went down by 10% to 85,600. In 2015, the industry harboured around 95,500 workers.
Chua explained, "The tightening of work permit quota, fewer recruitments, retrenchment and natural workforce attrition contributed to the drop in the industry's workforce in 2016. The number of workers employed in the industry has been decreasing since 2013,'' Chua noted.
Meanwhile, the report also took note of how individual sectors performed in the past year. Turnovers for offshore building declined by 13.4% to S$8.3b, but it still is the largest contributor to the industry's total yields. Gains from shipbuilding also declined, sharing only S$200m in the past year. Low sales were also seen in ship repair sector, which contributed S$4.6b.
Overall, the Singapore's offshore and marine industry ended the past year with a total turnover of S$13.1b, down by 11.3% than the previous year's gains of S$14.7b.