How well did we predict 2016?

6 January 2017

The start of the year is a high time for predictions. All respected research institutions and experts are rolling out their crystal ball to forecast what will lay ahead, while old views, that were so-often wrong are forgotten instead of being reviewed. Today, I offer you a review of the predictions we made for 2016 on our website last year. As you can see our predictions were reasonably correct.


   Resonably correct   
   Slightly over-optimistic/over-pessimistic 



2016 Predictions



1. The world economy expands by 2,9%

The United States is predicted to remain solid, China to grow at a slower pace and the Eurozone to perform a slight growth.

Actual world GDP will end at 2.5-2.7%



2. Commodity prices remain low

Excess global supplies of coal, iron ore, crude oil and other commodities, keeps commodity prices down and slows growth in emerging markets such as: Latin America, Africa, and parts of Asia.
Most metal and mineral commodity prices improved

3. Middle East’s economic growth remains restrained

Drop in oil prices, regional political instability, and war with the Islamic State all restrain growth in the Middle East.


4. Interest rates increase and the US Dollar strengthens

The US Federal Reserve increased their interest rate for the first time in a decade in December 2015 and flags for more raises over the next years. Other mature countries will follow.


5. Factory new light vehicle demand expands by 2,8%

Mature markets (US and Western Europe) will remain in growth or recovery mode. China’s automotive demand will improve while other large emerging markets will likely face a mixed performance. Brazil and Russia will be in deep contraction. India will see accelerating growth, ASEAN will return to modest growth and Africa’s growth will remain flat. 

Actual demand growth will
end at 4,2% thanks mainly to heavy sales incentives in China and the U.S.

6. High and Heavy markets experience constrained growth

This is a result of low commodity prices and decelerating global construction spending. High debt levels combined with increasing interest rates (reference 4.) in many countries negatively affect public projects.


7. Breakbulk markets decelerate but opportunities remain

Renewable energy and energy efficiency projects, urban mobility projects and projects related to the industrialisation of emerging markets will continue.


8. World trade volumes continues to grow at subpar

In the past, world trade grew twice as fast as the global economy. This relationship is now one-to-one, affecting the volumes of cargo being transported between continents. For 2016, there is a risk of a contracting global trade environment.


9. Global vessel overcapacity

Many shipping sectors will face the need for increased recycling. The PCTC industry is however in a better position than many other sectors. With appropriate re-arrangement of smaller tonnage from deep-sea to short-sea and recycling of old and less efficient vessels, the industry will give way to the new, larger and smarter vessels without much implication to total deep-sea capacity.


10. The risks surrounding the global economy increases

This is driven by China’s rising debt and excess capacity, conflicts in the Middle East and Africa, the high Eurozone debt burden and a corporate risk aversion in developed countries.



Stay tuned for our 2017 predictions!

Teresa Lehovd is the Head of Market Intelligence at Höegh Autoliners. She holds over 30 years of experience in the RoRo shipping industry, whereof 20 years in various market research positions where she is specialised in the research of global automotive and heavy equipment industries. Teresa is also a guest lecturer at the Norwegian School of Management in the area of Competitive Intelligence and Shipping, and frequent speaker at various industry conferences.

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