This is our fifth survey and every single one of them has been conducted during a period of really difficult economic recession. I think the good news is that the survey does appear to show that there’s a lot of optimism returning to our markets. I was very interested to see that over 80 per cent of rail respondents, something like 75 per cent of aviation respondents and even nearly 70 per cent of shipping respondents were very confident about the future prospects of their business. Now that said, what I would say is that there are concerns that remain about funding for the industry and if I may say so, that is really borne out by some research that we recently carried out as a firm, we noted that in 2007 which was the last year before the recession hit something like a 170 billion that’s US dollars was made available to the shipping and offshore industry and 75 per cent of that, that’s three quarters was made available by banks primarily through debt finance. Now by 2012 which is the last year that we have full numbers for and the figures for 2013 will be out shortly and I don’t think they’ll be too far off this, but only US$110 billion were made available to the shipping and offshore industry.

Now that’s a shortfall or, if you like a black hole, of US$60 billion, but I think the most interesting part of that is that that 110 billion is made up almost equally of equity, which is both capital markets and private equity, the bond markets as well as debt. Now it’s the first time in my career that debt financing hasn’t been the main contributor to the shipping industry certainly so far as its financing is concerned. The banks are struggling, the economic recession that hit in 2008 has really affected their ability to make the kind of levels of finance that the industry needs available and although the capital markets, the private equity markets and the bond markets in particular have really stepped up and have made monies available I don’t personally see there’s any possibility of them making up that 60 billion shortfall. But irrespective of that I think one of the interesting things about our survey is that it also evidences that particularly in the shipping and aviation sphere many companies are going out looking to buy new assets, they want to look at joint ventures, they want to look at alliances, the rail industry is always looking to improve and expand on its infrastructure, so I think there’s a very positive element and I think in a large part that’s the result of the stabilising world outlook, which is helpful for all of us.

What I found helpful this year is that there is a great deal of concern about overcapacity particularly in the shipping and aviation sphere. Now as I’ve just said it’s those very industries that are going out looking to buy the very assets that are causing that overcapacity, so I think that’s quite an interesting finding. For me one of the most interesting findings of all, if I may say so, is the fact that the industry is very concerned about skilled labour going forward. Now that’s particularly so in the Middle East where something like 38 per cent of our respondents were concerned about finding the right people, with the right skills to do the right job. But only 6 per cent of the respondents seemed to be doing anything about it and I think that’s something the industry really needs to focus on going forward. A lot of it’s to do with education but ultimately it’s to do with investment. It’s very difficult in a time of recession to set money aside for staff. I think people are looking to keep their business going and relying on what they’ve got, but I think ultimately that investment is going to be necessary and it’s clear that, certainly the respondents to our survey, are well aware of this problem.

I think for the first time in the last four years whilst China remains at the very top of the list and remains the focus of investment, this year it’s very closely followed by Western Europe and North America. The so called BRIC countries other than China appear to have fallen out of favour. We’re talking about Brazil, Russia and India. And I think that’s in large part due to the fact that they haven’t really grown and continued to grow at the sustained levels that China has managed to maintain.

I have hopes rather than predictions, I very much hope that we’ll see the end of this recession, it’s been a long and difficult one, but if I may say so the industry hasn’t come out of it too badly. I have some concerns, I think as with a great number of our respondents the real issue is overcapacity and we are seeing a tremendous amount of new buildings on the shipping side and also on the aviation side. I’m quite concerned as whether the market will be able to absorb all of those new buildings and all of those new assets without hitting our industry, we could end up in a double dip if we’re not careful because ultimately it’s all a question of demand and supply. If you have too many assets it’s a very simple equation, their value will fall and the price to employ them will fall and that’s not what the industry needs right now. Having said that, there are signs that the economies of the world are stabilising, there’s a lot more demand for transport, transport always benefits when there’s an economic boom just look at the period between 2002 and 2007. So look I’m very hopeful and my great wish is that next year I’ll be here talking about the Norton Rose Fulbright transport survey for 2015 which will be entitled “End of Recession”.

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