The Boom from Abroad

The hottest shares on the New York Stock Exchange last week were the shares of U.S. shipbuilders. New York Shipbuilding Corp. jumped from 36 to 54 7/8 in two trading days; Newport News closed the week at 79 1/4, or 29 1/4 points above its 1956 low. American Ship Building rose from 97 3/4 to 102. The greatest shipbuilding boom in the world's peacetime history had finally reached the U.S.

Long before Nasser seized the Suez Canal, the boom had started abroad in anticipation of a huge increase in the free world's oil consumption--and of possible trouble when Egypt could legally take over the canal in 1968. Today, more than 1,500 steamships and motorships, totaling 7,500,000 gross tons, are being built around the world. Great Britain, leader in the field, is constructing more than 2,000,000 gross tons, cannot promise deliveries on new orders until 1962. France is building 73 tankers and dry-cargo ships totaling 465,462 gross tons. This month the German shipbuilding industry reached an alltime peak.

Hope Ahead. Japan's shipyards are enjoying a tremendous revival, brought about, largely, by U.S. Shipbuilder Daniel K. Ludwig, owner of the world's second largest private fleet. Last week Ludwig's National Bulk Carriers, Inc., announced its future plans for two monstrous 103,000-ton oil and ore carriers--the world's biggest--to be built in its Kure, Japan shipyards.

High labor and construction costs, which in the past have taken business away from U.S. yards in favor of low-cost foreign builders, have kept the worldwide boom from reaching the U.S. sooner. But now that foreign shipyards have reached their capacity, the shippers have nowhere else to go. Two years ago, not a single U.S. shipyard had a new ship-construction contract; today 58 tankers and cargo ships are being built and 23 more are on order. The New York Shipbuilding Corp. has $70 million worth of 1956 orders for tankers. Newport News has a quarter-billion-dollar backlog of orders. Mississippi's Ingalls Shipbuilding Corp., biggest in the Deep South, has enough contracts to keep it busy through most of 1958.

World's Biggest. Like many another U.S. shipyard, Ingalls is not equipped to build the large ships now most urgently in demand, but it is already benefiting from the rush of orders to the larger eastern yards. "We are not going after the vessels of 60,000 tons and up," says Ingalls' President Monro Lanier. "But the demand for ships of that size is a stimulus that takes up market space in larger yards, leaving smaller ships for yards of less capacity." Although many U.S. yards, especially in the West, have not yet felt the initial boom, shipyards such as Kaiser's Vancouver, Wash, yard are being put into shape in anticipation of just such an overflow of orders--provided that the shortage in steel plate can be licked. "The shipbuilding industry will have to operate at 30% to 40% of its potential," says Leigh Sanford, president of the Shipbuilders Council of America, "if we don't get enough steel to meet our orders."

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