During the First World War the shipbuilding industry on the Clyde was greatly enlarged for the construction of both warships and merchant ships. In the expectation, with the coming of peace, that orders would increase to replace wartime sinkings, further investment was planned, particularly by the Belfast shipbuilders Harland & Wolff who had acquired several yards on the river.
However demand collapsed in the early 1920s as the world sank into recession. Orders were cancelled and men were laid off. There followed a painful period of rationalisation; some yards, such as the Dalmuir yard of William Beardmore & Co., closed for ever and others, such as Fairfields, were taken over. After work stopped on Ship No. 534, the Queen Mary, in 1932, her abandoned hull looming over Clydebank became a symbol of the depression throughout the world. Despite the difficulties there was innovation. Harland & Wolff pioneered the construction of marine diesel engines at its Lancefield works and the Blythswood shipyard was established in 1919 to build oil tankers.
With the growing threat from Hitler's Germany in the mid-1930s a programme of rearmament stimulated recovery. Out of range of enemy bombers for much of the Second World War, the Clyde played a vital role in ship construction and repair. Victory in 1945 saw a surge in demand and berths were fully booked well into the 1950s. Concerned that history would repeat itself, most builders failed to invest in new facilities. By the late 1950s this once proud industry was in decline.