| |
A new Shipping Confidence Survey by Moore Stephens has revealed that a majority of shipping interests expect ship finance costs to rise over the next twelve months. Ship owners and managers were significantly more confident about market performance over the coming year than were charterers, while operating costs, demand trends and crew supply were cited most frequently by respondents as the most significant factors likely to impact on business performance.
On a scale of 1 to 10, the overall confidence shown in the market by owners and managers came out at 7.1 and 7.2 respectively, while that of charterers was 6.1, this against an overall average of 6.8. Factors adversely influencing the confidence of respondents included the possibility that recession in the US could affect the Chinese market as a major driver of shipping business, and doubts about the ability of shipyards to deliver sufficient numbers of ships to cope with demand. A continued growth in world trade based on the booming economies of China and India, and a second-half growth in trade predicated on an expected upturn in the US economy, were meanwhile cited as reasons for optimism.
So far as business performance factors were concerned, 39 per cent of respondents cited operating costs as the most significant contributing factor, followed closely by demand trends (38 per cent) and crew supply (36 per cent). Both owners and brokers expected demand trends to be the most significant factor. Managers placed crew supply at the top of the list, while charterers opted equally for operating costs, fuel costs and competition.
Owners emerged as the most likely to make a major investment or significant development during the next twelve months, with respondents in this business category returning a score of 6.8 out of 10, compared to an average across all sectors of 5.9. Ship managers scored 5.7 in this respect, and charterers 5.0.
Overall, 56 per cent of respondents expected finance costs to be higher in twelve months’ time than they are at present, while 20 per cent expected them to be lower. There were interesting variations between the different business types, with 76 per cent of advisers expecting an increase in costs, but only 47 per cent of brokers holding the same view. More than 50 per cent of owners and managers, meanwhile, expected finance costs to rise.
There were also some marked regional variations in this category, with 58 per cent of respondents in Asia expecting finance costs to be higher, compared with 50 per cent in North America. In Europe, 57 per cent of respondents (just slightly above the overall average) predicted an increase in finance costs, compared to only 43 per cent in the Rest of the World. In Europe and North America, meanwhile, 17 per cent of respondents expected finance costs to be lower, compared to 29 per cent in the Rest of the World.
Opinions about the direction in which freight rates in the tanker market were likely to move over the next twelve months showed some sharp variations, with 62 per cent of charterers expecting rates to be higher, compared to only 35 per cent of owners. On the other hand, 36 per cent of owners who responded expected tanker rates to be lower, compared to just 15 per cent of charterers. Regionally, 36 per cent of European respondents – the largest group overall – anticipated lower tanker rates, compared to the 31 per cent who expected them to be higher.
In the dry bulk sector, meanwhile, 40 per cent of respondents expected rates to be lower in twelve months’ time, with 28 per cent anticipating an increase. Charterers differed in their view from the other business types, with 62 per cent predicting higher bulk rates.
Finally, 43 per cent of charterers felt that rates in the containership market would be higher in twelve months’ time, as against only 28 per cent of owners.
Click here to download a pdf copy of the report.
- The Moore Stephens Shipping Confidence Survey includes responses from key players in the international shipping industry to a targeted, web-based survey by the Moore Stephens Shipping Industry Group. Responses were received from owners, charterers, brokers, advisers, managers and others in the UK, Rest of Europe, USA, Canada, Russia, China, India, Rest of Asia, Latin America, Africa and Australasia. It is hoped to publish a further survey in June 2008.
For more information:
Richard Greiner, Moore Stephens LLP
Tel: +44 (0)20 7334 9191
richard.greiner@moorestephens.com
|