The UK subsea industry has created 16,000 new jobs and is now worth £8.9billion – almost half the global market – according to new figures released today.
The growth of subsea operations in the North Sea has played a significant factor in the industry’s increasing strength, with the north east of Scotland accounting for more than 75% of revenue generated in the UK.
The region’s strength is also reflected in export figures, with a new report by Subsea UK finding 70% of the UK’s £4.3billion in exported goods and services being generated from the north east.
Overall the global subsea market is worth £20billion, with the new Subsea Business Activity Review predicting the UK sector could grow to more than £11billion by 2016.
“Not only has our sector out-performed any other in the UK, it has improved its global position and now dominates with an impressive 45% of the global market, despite a faltering economic climate,” said Subsea UK chief executive Neil Gordon.
“The increase in activity in the North Sea has played a major factor in this continued growth but exports remain high, accounting for 43% of total revenues.
“Subsea has become increasingly important to the upstream energy sector, both in terms of developing and stimulating further investment in the UK continental shelf and in growing the UK’s export base.
“Extracting the remaining world’s reserves will increasingly fall to the subsea industry – already almost 45% of UKCS production comes from subsea wells with 70% of new developments planned. It is therefore of vital importance to the security of the world’s energy supply.”
The industry’s near-50% growth over the last three years has seen 16,000 new jobs created, bringing the total number employed in the UK subsea sector to 66,000, compared to 40,000 in 2010. 53,000 of those are employed directly, with a further 13,000 in indirect roles.
36,281 of those employed in the UK subsea industry work in the north east of Scotland.
Almost half (48%) of the subsea workforce were employed in engineering, construction or diving services, with manufacturing accounting for a further 19%.
The report, which surveyed more than 750 firms in the subsea industry, found £614million of subsea revenue was generated by companies in the east of England, and a further £400 million in north-east England. The south-east accounted for a further £126million, with the remaining £1bn generated the rest of Britain.
Norway and western African countries remain among the key export markets for subsea companies in the UK, though the report anticipates growth from South and North America.
The success of the UK subsea industry, and in particular the role of the north east in generating this revenue, was hailed by UK energy minister Michael Fallon.
“The subsea sector has earned the substantial praise it deserves – the figures in this report are truly impressive,” he said.
“Growth of £11 billion in the next three years, exports worth £4.3 billion a year and 80 per cent of revenues generated in the North East of Scotland, with a supply chain that stretches across the UK. The subsea sector has translated incredible feats of engineering and construction into market-beating performance. ”
The renewable energy market is still significantly behind the oil and gas sector in terms of generating revenue for UK firms, according to the report’s findings.
Almost 40% of the 750 companies surveyed said they did not provide any goods or servides to the renewables industry. Revenue from UK firms had more than doubled to £770million, with almost half that sum coming from the north-east of Scotland.
“With such a buoyant oil and gas market, it is hardly surprising that renewables account for only a small percentage of turnover although there are growing signs that this will increase in the future,” said Gordon.
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