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Growth drivers

The power generation market is expected to remain at a good level in 2012. The growing emerging markets will continue to invest in new power generation capacity, which will drive demand - especially in the flexible baseload segment. In the OECD countries, there is still pent-up power sector demand, mainly driven by CO2 neutral generation and the ramp down of older, mainly coal-based, generation.

The overall outlook for vessel contracting activity during 2012 remains largely unchanged, with full year contracting expected to be at a similar level or slightly lower than in 2011. Contracting is expected to remain slow for bulk carriers, container vessels and tankers. In these sectors efficient designs are expected to be a common theme in contracting negotiations, due to economic pressures to reduce fuel consumption. Contracting in the LNG carrier segment is expected to remain robust during the year, with levels in line with activity seen during the first quarter of 2012. The offshore segment continues to present good future contracting opportunities, especially for drilling ships and support vessels. The interest for gas fuelled vessels has increased also in segments that have not previously been powered by gas. The environmental agenda is also expected to remain a central issue, thus driving interest in solutions for environmental compliance.

Despite the slightly improved market situation in the first quarter, some uncertainties remain in the service market. The merchant marine segments are still expected to be under pressure, as overcapacity in the market continues to impact the potential for services in this area. Development in the active installed base is also expected to be moderate, with continued scrapping, layups, slow steaming, and the low utilisation of vessels in the merchant segments. The power plant service market is expected to develop steadily.