Confidence in the shipping industry has fallen to its lowest level for two-and-a-half years, according to the latest survey from BDO.
For the three months to the end of August 2019, the survey recorded an average confidence level of 5.8 out of 10, compared to the 6.1 recorded in May.
Geographically, confidence levels in Europe dropped from 6.1 to 5.7. However, in Asia, confidence was up from 6 to 6.8 – the highest figure for this region since the survey was launched in 2008.
According to Richard Greiner, partner, shipping and transport at BDO, geopolitical uncertainty has contributed significantly to the decline in confidence. He explained that a number of respondents expressed concern about the burgeoning trade wars and political tension in various parts of the world. “Ongoing indecision surrounding Brexit was also a salient factor,” said Greiner.
“But it was not all bad news,” he added. Confidence on the part of owners, charterers and managers was up in the last three months, as was the likelihood of imminent major investment – in the case of owners, to an all-time survey high.
“Indications from the freight markets were less encouraging, with a fall in expectations of higher rates in all three main tonnage categories. Indeed, net rate sentiment was negative in the container ship sector for the first time in almost four years. But shipping confidence must be weighed against the highly cyclical nature of the industry. Not every reversal in fortunes is a portent of significant decline,” he added.