September 27 - According to the latest Shipping Confidence Survey from Moore Stephens, shipping confidence, notably on the part of charterers and managers, improved for the second successive quarter in the three months ending August 2016.
In August 2016 the average confidence level expressed by respondents was 5.4 on a scale of 1 (low) to 10 (high). This is an improvement on the 5.1 recorded in May 2016, and the highest rating for the past nine months of the survey.
Charterers (up from 4.0 to 4.8), managers (up from 5.1 to 6.0) and brokers (up from 4.3 to 4.5) were all more optimistic than in May 2016. Owners, however, were less confident than they were three months ago, with scores falling from 5.7 to 5.3.
Overcapacity was the dominant theme of comments from respondents to the survey. One respondent commented: "Scrapping is still not sufficient to cope with newbuilding deliveries and the general supply-side overhang. Every new order will prolong the crisis."
The ratification of the Ballast Water Management Convention will serve to eradicate some of the over-tonnage issues in the dry bulk sector, the survey suggested.
"Implementation of the Ballast Water Management Convention will most likely solve overcapacity," said one, "but it will also cause a bloodbath among owners". Another respondent stated: "Growth is non-existent, so there is no hope there," while another still simply said, "We have lost confidence in the dry bulk market." Other respondents were slightly more optimistic, with one noting: "We expect the dry bulk markets to improve significantly during the course of 2017."
Concerns about the global economy were also at the forefront of the minds of a number of respondents. "Brexit, Trump, supply overhang, consolidation, demolition, bankruptcies, and the low risk appetite of banks for shipping and shipping stocks seem to be the main topics to follow for the next 12 months or so. We would be pleasantly surprised if this were to change," said one respondent.
The likelihood of respondents making a major investment or significant development over the next 12 months was unchanged on the previous survey, with a rating of 4.9 on a scale of 1 to 10. The confidence of charterers was up significantly, from 4.1 to 5.0; brokers also recorded a small increase, from 3.5 to 4.1. Owners and managers, however, were less confident than they were three months ago, dropping from 5.7 to 4.8 and from 5.4 to 5.3 respectively.
Demand trends, competition and tonnage supply featured as the top three factors likely to influence performance most significantly over the coming year.
Richard Greiner, Moore Stephens partner, shipping and transport, was encouraged by the results of its most recent survey: "Given the challenges currently facing the industry, the continuing uncertainty surrounding the worldwide economy, and the ongoing level of global geopolitical instability, it is encouraging to see an increase in shipping confidence for the second successive quarter. Confidence is now at its highest level for nine months, which says much for the resilience of the shipping industry."
|Richard Greiner, Moore Stephens|