International shipping confidence hits highest level since February 2011

INTERNATIONAL accountancy firm and shipping industry consultant Moore Stephens says the shipping sector confidence has reached its highest level since February 2011 at the end of fourth quarter, May 2012.

Average confidence in all markets was at 5.7, 1 for low and 10 for high with the 2011 confidence level at 5.6.

Despite fears of overcapacity and the eurozone crisis "leaving ship financing at the crossroads", according to respondents, confidence improved for a fourth successive quarter.

Container rates are predicted to rise in the coming year in all categories but the highest leap was from charterers in 15 percentage points to 41 per cent, followed by owners up 10 percentage points. Managers experienced the least confidence in rate increases from 30 per cent to 31 per cent.

But for overall confidence, ship managers increased the most from 5.2 to 6.0 breaking February 2011 level while owners and charterers remained unchanged at 5.6 and 5.0 respectively. Confidence dipped with brokers in the final quarter.

Regionally, Europe moved up 5.3 to 5.6 points while Asia remained stable at 5.7 and North America dropped from 5.6 to 5.5.

The survey has highlighted ongoing concerns of capacity surplus with one respondent seeing a problem beyond the immediate surfeit: "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 per cent cheaper to operate."