Almost the whole of the UK’s subsea industry has been hit by the collapse in oil prices, as 90% of companies say sales have decreased in the last 18 months, a new survey has found.
But the survey of 300 firms, all members of trade body Subsea UK, found that a significant majority were maintaining investment in technology and looking to increase exports to secure future growth.
A further 44% of respondents said that the “lower for longer” oil price environment has led to the industry becoming more receptive to new ways of working and adopting different techniques and innovations.
The sales drop has had a massive impact on companies’ bottom line as well as recruitment in the sector, an estimated a £9billion industry which employs around 50,000 across the country.
Up to 28% of those that said they have lost sales revealed they have fallen by 50% or more, while a further 28% reported a 30-40% drop in sales.
As a result, almost 70% of companies surveyed were not actively recruiting and 28% were recruiting fewer people than they were in 2015.
Just over a fifth of respondents said that they were still employing apprentices to support their business, however recruitment on the whole has dropped, with only 8% of companies reporting that they are looking to employ more people than they were 12 months ago.
Subsea UK chief executive, Neil Gordon, said: “The decline in oil price and subsequent industry-wide downturn has seen a massive reduction in CAPEX and OPEX budgets worldwide which have impacted on the subsea sector where we are seeing job losses and the collapse of companies, putting the UK sector’s enviable world-leading position under threat.
“The findings from our survey underline the negative impact on revenues and recruitment but they also reveal positive signs of the sector adjusting and adapting to the lower for longer oil price environment which will ensure we are well-placed for the future.”
More than half of the revenues generated among the UK’s subsea firms are attributable to international sales.
Mr Gordon said that the sector’s enduring success is based on its ability to maintain and grow its exports, which currently represent a third of the global marketshare.
Some 80% of respondents to the survey hope to drive growth by increasing overseas sales and exploring new markets with a focus on the Asia, the Middle-east, North America and Africa. Other countries of interest are Australia, China, Brazil and Norway.
Mr Gordon said: “Thankfully our survey shows that subsea companies are increasing their export efforts, exploring new geographic markets where their services and technology are in demand.”
Almost 80% of respondents are still investing in new technology and see this as an area of focus in the long-term to secure future growth.
Mr Gordon added: “The industry is more receptive to new ways of working and new technologies and we are starting to see the benefits of real collaboration towards reducing costs and driving efficiencies. It is encouraging that, against this backdrop, subsea companies are continuing to invest in the development of new technology.”
Recommended for you
