Confidence in shipping industry rose in the three months to end-February 2021, showing “a bright light at the end of the COVID-19 tunnel”, according to the latest Shipping Confidence Survey by UK-based BDO.
Overall confidence has risen to 6.6/10 compared to 6.0/10 in November 2020. This was driven predominantly by Brokers, up to 6.3 from 4.8. Confidence has also increased among Owners and, finally, Managers’ confidence has gone from 6.9 to a historic high of 7.1 out of 10.
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By region, confidence has gone from 6.6 to 6.7 in Asia, while confidence in Europe is closing the gap from the previous quarter by climbing from 6.1 to 6.5.
Meanwhile, the likelihood of respondents making a major investment or significant development over the coming year, having recovered from the low point of 4.0 out of 10 in May 2020, fell slightly from 5.3 last time to 5.2 this time. The increases across most business types and in Asia were offset by a fall in Europe from 5.5 to 5.1.
Shipping has, perhaps, been more resilient than other sectors and the continued and growing confidence illustrated by this report is testament to this resilience. However, there was a slight easing in the expectation of making a major investment, which may be an indicator that the way ahead will not always be smooth,
…stressed BDO.
The special question in this edition was about expectations of oil prices in 12 months’ time. Two-thirds of respondents believed the crude oil price will sit in the $50-59 and $60-69 brackets with scores of 32% and 35% respectively. Very few respondents expected oil prices to drop below $40 or climb above $80.
While COVID-19 led to a 4% decrease in seaborne trade in 2020, there are good reasons to believe that seaborne trade will recover through 2021 and even exceed pre-COVID-19 levels by the end of the year. The progress being made in tackling the pandemic continued to drive up confidence. Overall, this generally positive outlook is broadly present in all business types and across regions.
