Shipping confidence reached a four-year high in the three months to end-February 2018, according to the latest Shipping Confidence Survey by Moore Stephens — an accounting and advisory network.
A Moore Stephens’ Partner, Richard Greiner, reported on March 28 that the firm’s research had seen an increase in the average confidence level expressed by respondents, which was up from 6.2 out of 10.0 in November 2017 to 6.4 in February.
By region, confidence was up in Europe from 6.3 to 6.6, equalling the highest ever rating for this category of respondent in the life of the survey, which was launched in May 2008 with an average confidence rating across all respondents in all geographical areas of 6.8.
Confidence was also up in Asia, from 5.7 to 6.3, and in North America, from 5.8 to 5.9.
In the container ship sector, there was a two percentage-point increase to 38% in the numbers expecting higher rates, and a three percentage-point fall, to 12%, in those anticipating lower rates.
One of Moore Stephens’ respondents said: “Starting next year, the industry looks set to benefit from capacity reductions at shipyards, but the cost of funding will rise for most market participants.”
Another respondent added: “The shipping market is still characterised by high volatility and excess tonnage in most sectors, particularly bulk carriers and tankers, but there is cause for slight optimism.”
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Credit: Moore Stephens
In a post about the new research, Greiner said: “The volatile nature of the shipping industry dictates that optimism should be tempered with caution.
“But a four-year high in confidence must be welcomed as extremely good news.
“Shipping is more confident of making a major new investment over the next 12 months than at any time in almost four years, even though finance will probably be costlier to access in the year ahead.
“Net freight rate sentiment is positive in all main tonnage categories and, whilst slightly down in tankers, it increased both in the dry bulk and container ship trades.
“Familiar problems persist.
“Excess tonnage in many trades and insufficient demolition levels continue to perpetuate uncertainty, and freight rates are not yet at the levels required to turn promise into reality.
“In the wider world, the impact on shipping of continuing political unrest in the Middle East, the US President’s proposal to impose tariffs on US steel imports, and the response of other countries to this, remains to be seen.
“All of this serves to underline how vulnerable shipping is to geopolitical influences.
“But the industry must take heart from its proven durability. Confidence breeds confidence, and confidence breeds success.”
