Greater optimism was on show at this week’s Breakbulk Europe event in Bremen, although the general sentiment was that business conditions remain tough in all sectors.



In his opening keynote address Nicolas Clerc, chief economist at construction equipment manufacturer Caterpillar said that after the global economic crisis, the 2012 crisis in China, and the oil price decline in 2014, he feels that the tide had turned for companies that provide business for the heavy and out-of-gauge market.

Clerc said that with the global economy showing ongoing growth after years of restraint, there are now clear signs of increased investment in equipment and infrastructure, which can only be of benefit to logistics companies.

The economist also suggested that Caterpillar’s perspective as a global economic bellwether is that the three things required for investment: activity, confidence and appropriate financing options are all now present, suggesting that the upswing will continue. 

Purchasing managers' indexes around the world have been pointing upwards for around one and a half years. Although there had been a fall in March due to the long winter, April saw a return to growth. In the first quarter of 2018, a record high in business and consumer confidence was noted by the Organisation for Economic Cooperation and Development  (OECD).

Clerc said that the upswing is supported by loose monetary policies and expansionary fiscal policy, which give good conditions for further growth. "Interest rates in developed countries remained low, and in developing countries they may even fall. And most of the G7 countries pursue growth-oriented fiscal policies.”

However, Clerc also pointed to a rise in tit-for-tat protectionist trade barriers, the return of volatile financial markets, and soaring oil prices that could spell trouble for the global economy as it heads towards the 10-year anniversary of the 2008 banking collapse.

Nevertheless, global economic growth is seemingly on track to reach its highest level since 2011, and as the International Monetary Fund (IMF) maintains its projection for the world GDP at 3.9 percent, this could be good news for all shipping sectors.

 

www.caterpillar.com

www.breakbulk.com

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