Web Alert: Rise in contractor confidence in UKCS
15 December 2017
The 27th Oil and Gas survey conducted by Aberdeen& Grampian Chamber of Commerce, Fraser of Allander Institute and KPMG has found that 49% of the contractors surveyed are more optimistic about their activities in the current year and prospects going forward.
The survey looked at work in the six-month period to October 2017 and considered prospects in the year ahead as well as the next three to five years. The respondents were asked for their views on a number of issues including when they think the current downturn may ease. Encouragingly, 60% of those survey thought that the sector had reached the bottom of the current cycle (compared to 29% last year) while 24% thought this would happen within the next 12 months.
However, Aberdeen & Grampian Chamber of Commerce commented that there is significant diversity with some companies performing well while others remain fragile. Overall though, it is felt that the worst is likely to be over.
The survey also found the following:
- Activities: 83% of contractors surveyed expect an increased involvement in decommissioning over the next 3 – 5 years. Contractors are also expecting to become more involved in renewables (53%). Interestingly on average those surveyed felt that 72% of revenue would still come from core oil and gas activity in 2025.
- Employment and labour: 23% of contractors reduced employment in 2017 (compared to 68% in 2016), 47% remained stable (compared to 24% in 2016) and 30% increased employment (compared to 8% in 2016). There is a positive outlook going forward with a net balance of 36% of contractors expecting a rise in employment for both permanent and contract staff while the trend in skilled workers leaving the industry has eased a little.
- Future growth: 54% of those surveyed expect their business to grow by 1 January 2019 and none expected it to be declining.
This is positive news and seems to indicate that the industry is in a more stable condition. The efforts made by the industry to increase efficiency appear to be paying off.
The full survey can be found here.