Executive Briefings

Confidence of Maritime Shipping Industry Sinks to New Low

Overall confidence levels in the ocean shipping industry fell to a record low in the three months ending February 2016, according to a survey by shipping advisory firm Moore Stephens.

Respondents reported a confidence level of 5.0 out of 10 for the markets in which they operate, compared with a 5.6 out of 10 in November. It is the lowest rating ever in the survey's eight years of data collection.

Industry's view of conditions was down in all geographic regions, marking a 1.6-point drop in Asia, a 1.0-point drop in North America and a small decrease in Europe.

Among business areas, only brokers reported an increase in confidence (of 0.5 points). All others – especially charterers – were less sanguine in their assessment of the market. Charters' confidence fell by 1.6 points, owners’ by 0.9 points and managers’ by 0.3 points.

Expectations of making a major investment within the coming year fell to 4.8 points, equal to the lowest point recorded, during the heart of the Great Recession in 2009. One participant suggested that further investment is unlikely; already “we are paying for excessive investments over the past five years by speculative funds [representing] the quickest/largest destruction of capital in the shipping world.”

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Respondents reported a confidence level of 5.0 out of 10 for the markets in which they operate, compared with a 5.6 out of 10 in November. It is the lowest rating ever in the survey's eight years of data collection.

Industry's view of conditions was down in all geographic regions, marking a 1.6-point drop in Asia, a 1.0-point drop in North America and a small decrease in Europe.

Among business areas, only brokers reported an increase in confidence (of 0.5 points). All others – especially charterers – were less sanguine in their assessment of the market. Charters' confidence fell by 1.6 points, owners’ by 0.9 points and managers’ by 0.3 points.

Expectations of making a major investment within the coming year fell to 4.8 points, equal to the lowest point recorded, during the heart of the Great Recession in 2009. One participant suggested that further investment is unlikely; already “we are paying for excessive investments over the past five years by speculative funds [representing] the quickest/largest destruction of capital in the shipping world.”

Read Full Article