Shipping confidence has reached its highest rating in the past three years in the three months to end-August 2017, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.
The average confidence level expressed by respondents to the survey was up slightly from the 6.1 out of 10.0 recorded in the previous survey in May 2017 to a three-year high of 6.2.
The improved rating was attributable mainly to increased confidence on the part of owners, up from 6.1 to 6.5. Confidence levels on the part of brokers, meanwhile, fell from 6.4 to 6.3, while managers and charterers recorded more substantial drops - from 6.2 to 5.8 and from 6.4 to 4.7 respectively, the lowest levels in both cases since May 2016.
Confidence levels were significantly up in Asia from 5.6 to 6.4, their highest level since May 2014. In Europe, confidence levels rose from 6.2 to 6.3, but in North America confidence was down from 6.4 to 5.8.
Despite familiar concerns about excess tonnage capacity in many trades and continuing uncertainty over Brexit, several respondents saw reasons for optimism over the coming 12 months, not least as a result of what one described as "some green shoots of a relatively broad-based rebound in economic activity."
This helped maintain, at a three-year high, expectations of major investments being made over the next 12 months. Concern, however, persisted over political instability, the incipient cost of increased legislation, and the probable entry into the market of low-cost newbuildings.
Demand trends, cited by 27 percent of respondents, continued to be the factor expected to influence performance most significantly over the next 12 months, followed by competition (17 percent) and tonnage supply (15 percent), the latter displacing finance costs in third place.
In a completely separate question, respondents were asked to rank in order of priority what they considered to be the most significant new sources of finance for shipping over the next 12 months. Bank finance emerged as the first choice of 27 percent of respondents, followed by private equity (18 percent). Lease finance (14 percent) featured in third place, one percentage point ahead of shareholder funds.
Richard Greiner, Moore Stephens partner, Shipping & Transports, said: "Another three months, and another rise in confidence in the shipping industry, albeit a small one. Confidence has been increasing steadily over the past 15 months, and industry players are more confident of making a major investment over the coming year than they have been at any time in the past three years.
"This welcome boost in confidence comes at a difficult time for the industry, beset by overtonnaging in many trades, the current and impending cost of regulatory compliance, and more widely by geo-political pressures. Clearly, shipping still has a lot to offer existing and new investors alike, both traditional and external.