The North Sea oil and gas industry has largely avoided the mistake made in previous downturns of paying off large numbers of skilled staff.
This emerged in Aberdeen and Grampian Chamber of Commerce’s latest survey into the sector released yesterday, which revealed rising confidence.
Thousands of UK oil and gas workers were made redundant in previous slowdowns and left the industry forever.
While jobs have been lost in the north-east this time around, they have not been on the scale of the past.
Chamber chief executive Robert Collier said: “Firms continue to recruit in this recession, in marked contrast to the big dips in recruitment for 1999 and 2004.
“Whether this was for replacing staff (60%) or for additional staff (40%), the industry appears to have avoided the trap of losing too much talent this time round.
“It is important in this recession that firms explore all avenues to cut costs without cutting core skills if we are to be ready for the upturn.”
Mr Collier said temporary and contract staff appeared to have suffered worst for job losses in the current downturn and this trend was expected to continue.
Over the next three years, the majority of oil and gas producing companies expect to reduce staff – in contrast, 50% of contractors expect to increase staff.
The number of people in the UK working directly and indirectly in the oil and gas industry has been estimated at 450,000.
The chamber chief executive said the rising business confidence of contractors confirmed other economic data that the corner had been turned in this recession.
He said the change in confidence was more marked in the international area, with many north-east businesses boosting exports to take advantage of the weaker pound versus the dollar and euro.
Mr Collier said there was spare capacity in the oil and gas sector however, with 25% more operators and contractors working below optimum levels of capacity on both the UK continental shelf and in international markets compared to last year.
Less than half of firms increased pay in 2009, and the average rise of 4% was almost half that of 2007. A number also reported pay reductions.
The survey was sponsored by law firm McGrigors and conducted by the Fraser of Allander Institute at Strathclyde University.
McGrigors head of energy Bob Ruddiman said: “The report suggests the industry has tackled the recession better than many other sectors.
“While employment levels and limited pay awards are indicative of significant belt tightening and a certain lack of optimism, we are not seeing wholescale redundancy programmes.
“The industry appears to have learned lessons from previous downturns and has been mindful of the need to have a workforce to capitalise on future opportunity.
“The UK oil and gas industry offers the economy a dual benefit of maximising our indigenous oil and gas potential while also being a key exporter.
“Politicians have a duty to ensure we have a fiscal environment which encourages this and an energy policy which transcends political boundaries and has a vision beyond the next term of parliament.”
Pressure has been mounting on UK politicians to step up tax incentives to help boost investment in the North Sea.
Cliff Lockyer, a senior research fellow at Fraser of Allander, said that it was clear that the financial services were going to be less important as a major driver of Britain’s economy in the future.
“If the UK Government wants to drive the economy forward, it needs to look in slightly different areas,” he added.
Mr Lockyer said oil and gas could be a growth sector.
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