Oil & Gas UK’s Business Sentiment Index posted its fifth straight negative recording amid heightened market pressures.
Around 1,500 respondents recorded an average score of -25 on a -50/+50 scale –a two point increase on last quarter’s -27.
More than half of the respondents cited lower activity level in the third quarter than second. The lag in work means the “UK oil and gas industry remains very concerned about the future”, according to OGUK.
However, the two point rise was also dubbed a “glimmer of industry optimism” by the sector body.
Oonagh Werngren, Oil & Gas UK’s operations director, said: “While the overall index remains in negative territory for the fifth quarter in a row, there is a slight improvement in mood for the second quarter in succession. Respondents cite the positive impact of efficiency initiatives, such as improved management of inventory levels, business process reviews plus engaging with the workforce for ideas for efficiency improvements, as reasons for optimism. Some respondents also indicated a positive outlook regarding potential opportunities in the decommissioning market.
“The slight rise in optimism, however, is counter-balanced by a large number of companies expressing concern about future activity levels, with 55% reporting lower activity than the second quarter of 2015. Job losses continue to be a matter of concern to the majority of respondents, with just over 60 per cent indicating that headcount has already been or will be reduced.
“While the industry continues to operate in a tough business environment, exacerbated by the lower oil price, there is evidence to suggest that companies are increasingly responding to the challenge of improving production and production efficiency in the UKCS. There will be an opportunity to hear about progress in this area when Oil & Gas UK holds a breakfast briefing in Aberdeen on December 8 to share information on production efficiency and the latest developments in exploration.”
The survey, which targeted both operator and contractor companies, measured a number of economic indicators, including business confidence, activity levels, business revenue, investment and employment.
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