2013-12-25 22:03:34 - New Transportation market report from Business Monitor International: "Poland Shipping Report Q1 2014"
Recovery Will Be Slow And Protracted
Although we continue to predict a recovery in the Polish economy, we think it looks like being a rather long-drawn out affair, and have reduced our growth forecasts. We now expect 2013 GDP growth of 1.2%, down from the 1.5% we had pencilled in. We have also cut the projection for 2014 to 2.3% GDP growth (from 2.7% before) and for 2015 to 2.8% (from 4.1%). On the short term net exports continue to be the main engine of growth, although we see them improving relatively tentatively. The key here will be the performance of Poland's main export market, Germany. Although the domestic labour market remains weak, we think an improvement in H213 will help
lift household consumption. Certainly there are signs of gradual improvement in consumer confidence. We expect government spending to be muted, and investment remains in the doldrums. While all this points to a gradual improvement, medium term growth prospects are becoming increasingly challenging given low levels of R&D and innovation in Polish manufacturing and increasing competition from South Eastern European countries such as Romania and Turkey. This is likely to prevent a rapid return to 4%-plus annual growth rates.
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The country's major maritime ports will see positive growth in 2014, in most cases at rates significantly above GDP expansion. This is particularly so for Gdansk, which continues to see rapid development of its capacity, as well as good business links. The largest global container line, Maersk Line, is its customer, and the shipping company now offers the facility as a port of call on some of its direct Asia-Europe services, offering Poland's importers and exporters cheaper and quicker transport links to ports in China. While at a much lower rate, Gdynia is also expected to grow, having enhanced its container role following its addition as a port of call on Hapag-Lloyd's service and further improvements of its intermodal links.
Headline Industry Data
* 2014 port of Gdansk tonnage throughput forecast to grow 10.9% to 38.779mn tonnes. Over the medium term to 2018 we project an 8.7% average annual increase.
* 2014 port of Gdansk container throughput forecast to grow 17.6% to 1.485mn twenty-foot equivalent units (TEUs). Over the medium term we project a 12.3% average annual increase.
* Port of Gdynia tonnage to increase 2.6% to 16.339mn tonnes, with five-year average annual growth at 3.6%.
* Port of Gdynia container handling growth predicted to be 6.8% in 2014, to 779,114TEUS, with growth set to average 6.5% on the medium term to 2018
* 2014 total trade growth forecast at 3.25%, up from an estimated 2.5% in 2013.
Key Industry Trends
Double Digit Growth At Gdansk
The Polish port of Gdansk registered a 26.8% year-on-year (y-o-y) rise in bulk cargo throughput to 16.41mn tonnes in January-July 2013, according to the port authority. Transhipment of grain cargo, and general cargo and timber grew by 26.9% y-o-y and 20.8% y-o-y to 622,253 tonnes and 6.06mn tonnes respectively. Transhipment of other bulk cargo fell by 48% y-o-y to 1.42mn tonnes, while coal and liquid bulk cargo jumped 4.1 times and 34.6% y-o-y to 2.92mn tonnes and 5.38mn tonnes respectively. The port authority reported that box traffic grew by 34.4% in the first seven months to reach 665,990TEUs. The Deepwater Container Terminal (DCT) at Gdansk managed to handle 565,622 twenty-foot equivalent units (TEUs) in H113. DCT throughput is likely to reach about 1.1mn TEUs in 2013.
Swinoujscie LNG Terminal Makes Strategic Sense Despite Uncertain Profitability
The Swinoujscie liquid natural gas (LNG) terminal will help Poland reduce its dependence on Russia for gas supplies, according to consultants Ernst & Young Advisory (EYA). An EYA report said that because of volatile market conditions in recent years, there have been doubts over the profitability of LNG terminals and investors have become 'quite rightly wary'. But the picture was changing with the emergence of a range of new export terminals in places as diverse as Angola, Senegal, Australia and the Siberia-Arctic region.
Perceptions of pipeline supplies being more secure than maritime tanker supplies were also changing, with growing awareness that a pipeline can be 'held hostage' by the countries it runs through. While it was best to focus on the long term to assess the cost-benefit of building new terminals, once a port had decided to invest, 'none of its decisions are ever again going to be entirely just about the market' as it will be tied into a country's energy strategy, EYA said.
Room For Growth In Polish Ports
A combination of growing exports and containerisation 'could become the main force driving the demand for port services both in Poland and the whole region of Central and Eastern Europe', according to a study by real estate research company Jones Lang LaSalle. Jones Lang LaSalle argues that unlike some of their competitors, Polish ports have significant potential for growth. Whereas the biggest ports in Europe are already crowded and their spatial potential is limited, on the Polish coast there is still room to invest and expand. Simplification of tax, customs and sanitary procedures, as well as further development both port and inland infrastructure will allow Polish ports to compete for clients from industrial regions of southern Poland, some regions of the Czech Republic, Slovakia and countries of the former Soviet Union, the study concludes.
Risks To Outlook
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