Peter T. Leach, Senior Editor | Jun 27, 2012 9:31AM EDT
Overall confidence levels in the shipping industry, including the container ship market, increased in the three months ended May 2012, to reach their highest point since February 2011, according to the latest Shipping Confidence Survey by Moore Stephens.
The shipping consultancy said this is the fourth successive quarter in which there has been an improvement in confidence, leading to an increased expectation of new investment on the part of respondents, despite anticipated growth in the cost of financing over the next 12 months.
In the container ship market, 34 percent of respondents overall expected rates to go up, compared to 31 percent in the previous survey.
The number of respondents anticipating higher container rates over the coming year was up in all categories, in the case of charterers by 15 percentage points to 41 percent. For owners, the increase was from 28 percent to 35 percent, and for managers from 30 percent to 31 percent.
In May 2012, the average confidence level expressed by all respondents in the markets in which they operate was 5.7 on a scale of 1 (low) to 10 (high), compared to the figure of 5.5 recorded in the previous survey in February 2012, and to the 5.6 recorded one year previously, in May 2011. The survey was launched in May 2008 with a confidence rating of 6.8.
The biggest increase in confidence was recorded by ship managers, up from 5.2 to 6.0 this time, the highest figure for this category of respondent since February 2011. Confidence among owners and charterers remained unchanged, at 5.6 and 5.0 respectively. Brokers (down from 5.6 to 5.2) were alone among all respondents in being less confident about the market than they were in February 2012. Confidence was up in Europe for the fourth successive quarter, from 5.3 to 5.6, stable in Asia at 5.7, and down in North America from 5.6 to 5.5.
Respondents to the survey expressed a high level of concern about the global economy, and particularly about problems within the eurozone. One said, “The European economic crisis is worsening, leaving ship financing at the crossroads.” Two familiar causes of concern were again evident in the responses to the survey, the first of which was summed up by the respondent who emphasized, “There are too many ships coming onto the market.” One respondent foresaw a different kind of problem arising from the surfeit of tonnage, warning, “For the first time in a long while, shipping could face a situation where newbuildings currently being delivered may be rendered technically obsolete in five years’ time by new ships being ordered today which, due to technical innovations, may be up to 20 percent cheaper to operate.”
Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.