The UK’s underwater industry rose in value by £1.2 billion over the last year, growing from £8bn to £9.2bn, the Global Underwater Hub (GUH) has revealed.
According to research from the body, the underwater industry now supports over 51,000 jobs across the country.
The group’s 2024 Business Survey market prospects remain high, especially in offshore energy. A total of 92% of respondents consider offshore wind to be a primary or secondary market, with 60% saying that oil and gas also remains their short-term priority.
According to the survey, nearly 90% of companies believe they have the necessary capabilities to meet demand.
“Our world-class underwater supply chain rightly sees itself as having the necessary, leading capability to harness the opportunities across all its markets, particularly in offshore energy, said GUH chief executive Neil Gordon.
“It is closing the gap towards having the necessary capacity to meet demand but does not have sufficient confidence in project timelines and returns to trigger the necessary investment.”
However, the GUH added that the industry needs project certainty to accelerate the global energy transition.
The survey warned that confidence in how or when projects will be delivered has declined – 62% believe that project timelines will be missed.
The GUH said this lack of project surety and a “concerning” uncertainty about timelines is making it tough for companies to tie business and investment plans back to final investment decisions, tender awards and project sanctions.
Its research added that 52% of responding companies will require significant levels of investment in the next four to ten years, with 35% requiring major investment now.
Gordon added: “If these businesses are to invest and plan for the coming decades, they need strong market signals and commitment at various stages of a project and market development. Aligned policy, timely consenting, sensible financing, concrete project timelines and clear supply chain investment are imperative to move projects from the drawing board to the seabed.”
Industrial strategy
Despite these challenges the industry is continuing to grow, with 57% of respondents confident that roadblocks to success can be overcome.
However, only 11% believe there is enough visible commitment to projects in the form of appropriate policy and finance. Indeed, the lack of positive market signals is prompting UK companies to consider relocating overseas.
To counteract this, GUH has called on the UK government to recognise the scale and potential of the underwater industry to generate wealth, jobs and exports and ensure its industrial strategy provides what is needed to reach that potential.
While 80% of respondents to the survey said they have confidence in global underwater markets, with significant overseas opportunities for companies headquartered in the UK, GUH warns that exports could transform into wholesale moves abroad – significantly reducing the domestic footprint.
“The UK has cultivated a world-leading underwater sector with a supply chain that continues to report robust growth and is ready to support projects around the world. But we risk losing these organisations without an industrial strategy which supports both a just transition and our ability to take a world-leading role in new markets by leveraging our supply chain’s excellence across most project lifecycles,” said Gordon.
“Our supply chain has the capability and capacity to take on global projects, but we must ensure that the UK remains an attractive location from which to manage these and that UK projects are internationally competitive when compared with opportunities elsewhere.
“With an industrial strategy that encompasses multiple underwater markets and recognises that most supply chain companies will service a mix of these markets, we can sustain and grow the capacity and capability of the underwater industry through the transition in areas where the UK has a global competitive advantage.”
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