Rail tops industry confidence meter: survey

A study commissioned by global legal firm Norton Rose found that 68% of those surveyed from the rail sector expected an upturn in business over the next 12 months.

Aviation was the most pessimistic with almost half of the respondents from that sector not expecting a turnaround for another two to three years.

More than three-quarters of those surveyed from shipping expected consolidation in the sector.

While the data was gathered late last year, the predictions of consolidations or collapses within shipping might not be far from the mark, Harry Theochari, the head of transport at Norton Rose, said.

While banks had typically been patient with debt-heavy companies since global markets fell in 2008, the future of some remained uncertain.

"In the next few weeks, other things will become apparent," Mr Theochari told Lloyd’s List DCN during a visit to Sydney.

"Problems will emerge in several very large, well-established organisations which are simply running out of money."

Mr Theochari said passenger transport appeared to be a major factor in the rail industry’s comparatively optimistic view of for the year, given commuters were actually more likely to catch public transport in a recession than in buoyant times.

However, the need for more rail freight infrastructure – an issue Australia was presently grappling with – appeared a global trend that many governments were now supporting.

“Rail was the most optimistic – it’s the only mode where people said that now was a good time to invest,” Mr Theochari said.

"On the other side of the coin is the airline industry – they really need a good dose of valium.

"Most people were hugely depressed."

Nevertheless, Mr Theochari said that "everyone saw light at the end of the tunnel".

The research data – from a survey of 961 individuals across aviation, rail and shipping – found that 80% saw the rail industry as the most insulated from global economic turmoil.

Almost 80% did not expect available bank debt to return to pre-crisis levels within three years.

State intervention for struggling sectors of the transport industry would best be made in the form of new infrastructure as opposed to bailing out individual operators, the survey found.

Norton Rose eyes transport sector opportunities – full story in Lloyd's List DCN's March 18 print edition, sent to subscribers every Thursday.