Expenditure on fuel seen as ‘less significant’
Overall confidence levels in the shipping industry fell in the three months ended August 2012 to their lowest level for a year, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens
The fall, which follows three successive quarters of improved confidence, was fuelled largely by concern over the glut of newbuildings coming onto the market and by continuing uncertainty about the global economy.
In August 2012, the average confidence level expressed by respondents in the markets in which they operate was 5.3 on a scale of 1 (low) to 10 (high), compared to the figure of 5.7 recorded in the previous survey in May 2012, and identical to the figure posted one year previously, in August 2011. The survey was launched in May 2008 with a confidence rating of 6.8.
The likelihood of respondents making a major investment or significant development over the next twelve months remained stable, on a scale of 1 to 10, at 5.3, the highest figure since the 5.6 recorded in May 2011
Demand trends, competition and finance costs once again featured as the top three factors cited by respondents as those likely to influence performance most significantly over the coming twelve months. The numbers were up for demand trends (from 21% to 22%) and for finance costs (16 to 17%), but down in the case of competition, from 18% to 17%.
There was a 7 percentage point fall (from 51% to 44%) in the number of respondents overall who expected finance costs to increase over the next twelve months.
Once again, charterers, unsurprisingly, differed from owners and managers in their views about rates in the three main categories of tonnage covered by the survey. In the tanker sector, the number of respondents who thought that rates would increase over the next twelve months was down by 6 percentage points to 34%. The dry bulk sector saw a one percentage point fall, to 34%, in the overall numbers of those anticipating rate increases. In the container ship market, there was a 2 percentage point fall overall, to 32%, in the numbers expecting rates to rise.
Moore Stephens shipping partner, Richard Greiner, says, ” The fall in confidence recorded in our latest survey is clearly a disappointment. But it cannot really be termed a surprise. In some respects, shipping has been bucking the trend for the past twelve months, exhibiting increased confidence despite the effect on the industry of the political and financial woes in Europe and elsewhere, and the problems of overtonnaging and falling rates.
You may download a copy of the Report from Moore Stephens website
