Companies in the energy, resources and marine sectors (ERM) are rebounding as oil and commodity prices continue to rise and global GDP growth is projected to increase 3.4 per cent in 2019, according to the 2019 Energy, Resources & Marine Travel Forecast
Travel activity is also on the up, with air prices expected to climb 2.6 per cent globally next year.
“After a few challenging years, we saw a slow but steady recovery in 2018. We look forward to a more positive outlook for the year ahead – though with a few big caveats,” said Raphaël Pasdeloup, senior vice-president, CWT Energy, resources and marine. “We expect continued growth in energy, metals and minerals commodities, as well as shipping. But geopolitical tensions, including around trade and Brexit, and a host of new and untested governments, especially in Latin America, could throw this positive trajectory off-course.”
ERM industry activity and investments are closely correlated with the price of oil and commodities. Tight crude supplies, exacerbated by the US sanctions against Iran, beginning 4 November, are projected to contribute to higher prices. Meanwhile, the US exploration and production budgets increased to US$132.5bn this year, up from only US$88.2bn in 2016, when oil prices crashed.
Total world rig count is at the highest level since 2015, when it numbered 2,337 before plunging to 1,593 in 2016. The latest Baker Hughes Rig Count reports a healthy 2,273 rigs in operation. Companies in the ERM sector are poised to take advantage, having emerged from the recent downturn leaner and more efficient.
Growth in the marine sector is expected to be fairly flat, but container transport vessels are seeing an increase in work as the overall economy picks up. However, China, a key hub of container transport, is now seeing growth moderating, contributing to the slower outlook for the sector.
Renewables are on a different trajectory as the fastest-growing energy market globally. While this trend is set to continue, renewables still only account for about three per cent of global primary energy consumption.
While there are expectations of an uptick in travel activity overall, companies are likely to stick to their prudent ways, booking the lowest available fares, even as airlines pile on the ancillary fees. Revenues from these fees rose to US$82.2bn in 2017, up from US$32.5bn in 2011.
