2016: What does the new year hold in its hands?
The year ahead is framed with uncertainty but there are opportunities ahead for the well-positioned player. Our Head of Market Intelligence, Teresa Lehovd, has identified 10 trends that we can expect to see in 2016.
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.
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.
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.
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.