Belfast Telegraph

Thursday 27 November 2014

Halcyon days are no more, but the future is brighter

David Elliott, Business Editor
David Elliott, Business Editor

If you want to get a true insight into the health of the world economy you could do worse than speak to a ship broker.

They know what's going where, who's ordered what and have more of a handle on a nation's economic prosperity than some central banks.

Talk to them at the moment and you'll be considered lucky to have tied them down for more than a second.

That's because their phones are ringing off the hook with oil companies needing crude or refined products transported around the world.

Mostly it's for export from the US where new oil exploration techniques, such as fracking and tar sands, have released a wealth of reserves which were hitherto unreachable.

But to hire a tanker to take that oil across the oceans they'll have to pay up.

This is because a lack of investment during the lean years of global recession have left us with not enough ships to cope, a situation which has sent rates shooting higher.

That in turn has led to a boom in ship building, according to the Wall Street Journal, something which we in Northern Ireland used to be world leaders in.

It said orders for new tankers for the first nine months of this year have already reached 80 compared to just 68 for 2010 as a whole.

When orders for new tankers increase you can pretty much bet your bottom dollar that it's being led by booming economies and that bodes well for us.

It's just as well the future looks a little brighter because taking a look at the past closer to home gives cause for concern.

News that output from the production sector in Northern Ireland contracted year-on-year in the second quarter of the year shows we're not out of the recessionary woods yet.

On the upside, manufacturing, which represents around 85% of the index, seems to be gathering a bit of steam – up 0.2% over the quarter.

However, it is still well down on the peak of the halcyon days in of six years ago.

Hopefully, global demand for oil tankers, far removed as it might seem, is a good indicator that the future looks a little brighter for Northern ireland manufacturers and indeed for the rest of the economy.

Just ask a ship broker, if you can catch one.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk