The confidence of shipping stakeholders reached its highest rating over the past three years in the period March to May 2017, according to a new report by Moore Stephens.
The average confidence level of respondents surveyed went up to 6.1 out of 10.00 from the 5.6 recorded in the previous survey in February 2017, said the accounting and advisory service. Increased confidence was recorded by all main categories of respondent to the survey, which launched in May 2008 with an overall confidence rating of 6.8.
For brokers, the confidence rating rose from 4.6 to 6.4, while for owners the increase was from 5.6 to 6.1. The confidence of charterers and managers, meanwhile, was up from 5.9 to 6.4, and from 6.0 to 6.2, respectively.
Confidence levels were unchanged in Asia at 5.6, but up in Europe, from 5.5 to 6.2, and in North America, from 6.1 to 6.4.
A number of respondents expressed cautious optimism about the industry’s fortunes over the next 12 months, based largely on perceived increased levels of ship demolition and a rationalization of over-ambitious newbuilding plans.
This helped increase expectations of major investments being made over the next 12 months. Concern persisted, however, over political uncertainty, overtonnaging in certain trades, depressed oil prices, and a potential dearth of quality seafarers.
The likelihood of respondents making a major investment or significant development over the next 12 months was up from 4.9 out of 10.0 in the previous survey to 5.4, the highest level since August 2014.
There was increased confidence among all major respondents, in the case of charterers up to a level of 6.3 from 5.8 in February 2017. Owners and managers, meanwhile, each registered a confidence level of 5.9, up from 5.1 and 5.6, respectively, last time. Confidence on the part of brokers was up from 3.4 to 4.4.
Some 50% of respondents expected finance costs to increase over the coming year, compared to 54% in the previous survey.
Demand trends, cited by 26% of respondents, continued to be the factor expected to influence performance most significantly over the next 12 months, followed by competition (22%) and finance costs (14%).
The number of respondents expecting higher rates over the next 12 months was up on the previous survey.
In the containership sector in particular, the numbers expecting higher rates rose from 31% to 46%, while there was a six percentage-point fall, to 12%, in those anticipating lower containership rates.
Richard Greiner, partner for shipping and transport of Moore Stephens, said the latest confidence rating of 6.1 “must be seen as a robust rating,” given geopolitical, economic and industry developments.
“Moreover, confidence today of making a major new investment is the highest it has been for almost three years. The positive sentiment on freight rates is welcome, although this must be weighed against the lows to which they have fallen and from which they must continue to recover.”
Greiner added, “Our latest survey found many of our respondents in watchful mode, mindful of the fact that there are still too many ships, but encouraged to believe that increased demolition and more pragmatism by industry stakeholders will help to redress this imbalance. Respondents also remain cognizant of the impact which geopolitical developments can have on shipping.”
Photo: CC BY-SA 3.0
