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Shipping confidence rises for fourth successive quarter

Overall confidence levels in the shipping industry increased in the three months ended May 2012, to reach their highest level since February 2011, according to the latest shipping confidence survey by Moore Stephens.

This is the fourth successive quarter indicating an improvement in confidence and a corresponding increase in expectation of new investment by respondents, despite an anticipated hike in the cost of finance over the next 12 months, the London-based shipping adviser said.

In May 2012, the average confidence level in their market expressed by respondents was 5.7 on a scale of 1 (low) to 10 (high), compared to 5.5 recorded in the previous survey in February 2012, and to the 5.6 recorded one year previously, in May 2011.

The number of respondents expecting to make a major investment or significant development over the next 12 months rose, on a scale of 1 to 10, from 4.9 to 5.3, the highest figure since the 5.6 recorded in May 2011.

Demand trends, competition, and finance costs have been the top three factors cited by respondents as the mostly likely to influence performance over the coming 12 months. These were again cited in the latest survey, although the numbers were down: demand trends from 22 percent to 21 percent, competition from 20 percent to 18 percent, and finance costs down one percentage point to 16 percent.

The number of respondents who expected finance costs to increase over the next 12 months rose two percentage points, from 49 percent to 51 percent.

For the container ship market, the survey revealed greater expectations of higher rates, where 34 percent of respondents expected rates to go up, compared to 31 percent in the February 2012 survey.

“It seems unlikely that there is a more resilient industry than shipping. Despite the financial woes in Europe, notwithstanding the slump in the freight markets, and irrespective of tonnage overcapacity, our latest survey records an increase in confidence in the shipping sector for the fourth consecutive quarter,” said Richard Greiner, Moore Stephens shipping partner.

“It is true that the increased level of confidence recorded in the survey owes something to the conviction on the part of some respondents that the bottom of the market has now been reached. So long term players are looking to navigate a way through the difficulties currently besetting the industry, to emerge in calmer—and more profitable—waters,” Greiner added.


Photo: lumaxart


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