Source Moore Stephen vom 13.12.2011
Overall confidence levels and the likelihood of major new
investments in the shipping industry in the next twelve months picked up in the
three months ended November 2011, according to the latest shipping confidence
survey by leading accountant and shipping adviser Moore Stephens. This was
tempered by an expectation of a rise in finance costs. Respondents also
continued to exhibit a high level of concern about the negative impact of
overtonnaging on the market amid continuing fears about the global economic
climate, and the eurozone crisis in particular. In November 2011, the average
confidence level expressed by respondents in the markets in which they operate
was 5.4 on a scale of 1 (low) to 10 (high). This is up on the figure of 5.3
recorded in our August 2011 survey. Confidence was highest among managers,
unchanged at 5.6. Europe at 5.1 was the least confident of all geographic
regions covered by the survey. In May 2008, confidence in Europe was at a high
of 6.6, and as recently as August 2010 was running at 6.1. Respondents were
more optimistic of making a major investment or significant development over
the next twelve months, with the likelihood rising to 5.2 from 5.1 in the last
survey. Owners (up from 5.3 to 5.5), managers (5.2 to 5.4) and charterers (5.7
to 5.8) were all more confident. Expectations were unchanged in Asia at 5.2,
but were up in Europe, from 5.0 to 5.1. 24% of respondents (up from 22%) cited
demand trends as the most significant factor affecting business performance in
the next twelve months, with 17% opting for competition (unchanged from last
time) and finance costs (up from 16% last time). Fuel costs were down from 12%
to 9%, while tonnage supply increased by one percentage point to 13%. There was
a five percentage point increase this time (from 52% to 57%) in expectations of
an increase in finance costs. Owners (up from 53% to 57%) and managers (up four
percentage points to 56%) joined in believing that finance costs would rise.
There was an increase in the numbers of respondents in both Asia and Europe who
thought finance costs would rise (up from 50% to 54%, and from 53% to 61%,
respectively). In the tanker sector, the number of respondents expecting rates
to increase over the coming year fell from 34% to 30%. But, there was a 19 percentage
point increase (from 21% to 40%) in the number of charterers who thought rates
would go up. There was also a corresponding 19 percentage point fall (from 26%
to 7%) in the number of charterers expecting tanker rates to fall. Not for the
first time, the chartering sector seems to know something that other parts of
the market do not. For the first time in three years, those predicting a
decline in rates in the dry bulk sector exceeded the total of those who thought
they would increase. The percentage expecting an increase fell from 27% to 23%,
a new all-time low in the life of the survey. Meanwhile, 31% thought that rates
would go down; the highest level since the 43% recorded in October 2008. In the
container ship market, the number of respondents overall expecting a decline in
rates was higher than the number anticipating rate increases. Overall, just 23%
of respondents (compared to 28% last time) expected rates to go up, the
second-lowest figure since the survey began, behind only the 20% recorded in
October 2008. Meanwhile, 31% thought that rates would go down, the highest
figure since the 36% recorded in February 2009. Moore Stephens shipping
partner, Richard Greiner, says, “It says a great deal for the resilience of the
shipping industry that, despite the problems facing the sector, and
notwithstanding the acute difficulties bedevilling the world economy, our
survey showed a small increase in confidence. Like a boxer who refuses to lie
down, shipping is fighting to ride the punches and to bounce back off the
ropes. There was even an increased expectation that respondents would be making
a major investment over the coming twelve months. This is encouraging, and
supports the belief that now is a good time to buy for those who have access to
funding. “Nevertheless, it is undeniable that shipping is struggling on a
number of fronts. Seldom, if ever, can classic problems within the industry
have coincided with such a severe economic downturn and acute debt crisis.
Overtonnaging is the issue dominating responses to our survey and, even when
other concerns are raised, overtonnaging is still the elephant in the room. It
will doubtless remain so for some time, but the situation could be eased in the
shorter-term by sensible renegotiation and resourceful financing. “Meanwhile, operating costs are set to rise, with a
recent Moore Stephens survey predicting a 3.7% increase in 2012. Shipping is an
expensive business in which to operate, and the returns currently available
through the freight markets are generally not sufficient to offset operating
costs and leave any prospect of a return on investment. “These are challenging
times. The shipping industry which emerges intact from the current downturn
will be stronger than the one which entered it. The loss of some good, well-run
companies is the sad but inevitable result of the singular economic conditions
currently prevailing throughout the world. But the loss of short-termist,
inadequately funded companies will leave the industry in much better shape than
it was before the indicators started to point in the wrong direction.”
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