Shipbuilding and Repair NAICS 336611

May 20, 2026 - US Navy Looking Overseas for Shipbuilding Help

• Rebuilding the US naval fleet may increasingly rely on foreign shipbuilding expertise as the Navy confronts mounting labor shortages and production bottlenecks at home. Speaking at Sea-Air-Space 2026, Navy Secretary John Phelan said the service is studying whether allied shipbuilders in countries such as South Korea and Japan could help manufacture US warships, pointing to successful maintenance and repair partnerships already underway in the Pacific. South Korean firms HD Hyundai Heavy Industries and Hanwha Ocean have already secured three Navy maintenance contracts this year, highlighting the growing role overseas partners could play in easing pressure on the domestic industrial base. The Navy is also reworking shipbuilding contracts to reward faster delivery schedules, with bonuses tied directly to workers. The effort comes as the Pentagon’s proposed $65.8 billion shipbuilding budget for fiscal 2027 aims to expand the fleet from roughly 300 ships today to 381 vessels over the next three decades.
• America’s shipbuilding industry is ramping up hiring as the Navy pushes to expand its fleet, but workforce shortages and rising labor costs remain major obstacles to meeting production goals. Testifying before the House Armed Services Committee, Congressional Budget Office analyst Eric Labs said shipyards are struggling to attract workers to physically demanding jobs as housing and living expenses surge in shipbuilding hubs. At the same time, wages are climbing across the broader manufacturing sector, with Bureau of Labor Statistics data showing nonsupervisory employees at transportation equipment manufacturers earned an average of $38.76 per hour in April, up 7.7% from a year earlier. Shipyard jobs once paid three to four times more than comparable work, but now average just 1.2 to 1.4 times higher, intensifying competition for skilled labor even as the industry added nearly 20,000 workers over the past two years.

• The US shipbuilding industry is undergoing a major push for revitalization, driven by the Trump administration's 2026 Maritime Action Plan, which outlines investments in shipyard modernization, workforce development, and deregulation. However, the industry faces deep structural challenges - workforce shortages, aging infrastructure, chronic cost overruns, and a fleet that has shrunk even as budgets doubled. Major builder HII has responded with $600 million in planned 2026 capital investments and aggressive hiring. To bridge the capability gap with China, which produces over half the world's commercial ships compared to America's less than 1%, the US is leaning heavily on international partnerships: South Korea's Hanwha now owns Philadelphia Shipyard, HD Hyundai and HII are collaborating on AI and robotics, Finland is helping build Arctic icebreakers, and Australia has pledged $3 billion toward US submarine yards through AUKUS. Experts broadly agree these alliances are necessary but insufficient without sustained domestic reform.
• The swelling ranks of sanctioned “shadow fleet” tankers are becoming a growing headache for the global shipbuilding industry. Hundreds of aging vessels - many more than 20 years old - are stuck in limbo because government sanctions prevent their owners from selling or scrapping them through normal channels. That backlog keeps obsolete ships trading goods well past their safety and economic lives, clogging shipping lanes and dulling demand for new tankers. GMS, the world’s largest cash buyer of ships for scrap, has thrust the issue into the spotlight by seeking US approval to buy and dismantle sanctioned vessels. Its move highlights how sanctions are reshaping fleet economics: capital that would normally flow into newbuild orders is instead tied up in maintaining outdated ships, leaving shipyards exposed to weaker order books even as global trade capacity is oversupplied.