Despite several pressures from inside the industry and political uncertainties, the shipping markets still show confidence.
According to the latest survey from advisory Moore Stephens about the the three months to end-February 2017, the average confidence level expressed by resp[ds_preview]ondents was 5.6 out of 10.0, unchanged from the previous survey and equal to the highest rating since August 2015.
Owners were the only main category to show an improved level of confidence, up from 5.4 to 5.6. Confidence on the part of charterers was down from its all-time survey high of 6.8 to 5.9, while that of managers fell from 6.4 to 6.0. Confidence levels in the broking sector, meanwhile, dropped from 5.6 to 4.6. The survey launched in May 2008 with an overall confidence rating of 6.8.
The report says that respondents generally felt that competition was running at very high levels, while other familiar concerns included overtonnaging and geopolitical uncertainty. Most respondents saw 2017 as a year of retrenchment rather than improvement.
The likelihood of respondents making a major investment or significant development over the next 12 months was unchanged for the fourth successive quarter, at 4.9 out of 10.0. Managers’ expectations were up from 5.2 to 5.6, the highest level since August 2015. Owners’ expectations were also up, from 5.0 to 5.1, but those of charterers and brokers were down, from 6.4 to 5.8 and 3.8 to 3.4 respectively.
More actors expect finance cost to rise
The number of respondents expecting finance costs to increase over the coming year rose by one percentage point to 54%, the highest level since November 2011. Owners’ expectations of increases fell from 58% to 57%, while the figures for brokers were also down, from 53% to 41%. Managers were of a different mind, with 61% expecting increases as opposed to 52% in November 2016.
Demand trends overtook competition as the factor expected to influence performance most significantly over the next 12 months, followed by finance costs and tonnage supply. The number of respondents expecting higher rates in the tanker market over the next 12 months fell by eight percentage points to 25%, while the number anticipating lower tanker rates rose from 24% to 28%. »Meanwhile, there was a three-percentage-point rise, to 44%, in the numbers anticipating higher rates in the dry bulk sector«, it was said and added, in the container ship sector, the numbers expecting higher rates rose from 27% to 31%, while there was a three-percentage-point fall, to 18%, in those anticipating lower container ship rates.
Richard Greiner, Moore Stephens Partner, Shipping & Transport, commented, »After three successive quarterly increases, shipping confidence has held steady. This is encouraging given the continuing political uncertainty in the US and Europe. Shipping is vulnerable to changes in the political landscape, and a slew of elections in leading industrialised nations will render it particularly so this year.«
