A new report from the Bank of Scotland paints a picture of cautious optimism for the oil and gas industry, with signs that many companies are ‘gearing up’ for growth.
Key findings of the new report include the revelation that more than half of oil and gas firms are planning for growth, and that there are signs job cuts are starting to slow.
The sixth annual Bank of Scotland Oil and Gas Report gathers views from across the industry and its supply chain. It sets out to analyse the state of the sector, and the challenges it is facing.
As well as finding that business confidence had grown in the last year, the report also picked up on a dramatic swing in the net balance of firms feeling optimistic, from just 2% in 2016 to 39% in 2017.
Even though oil prices remain low, 58% of companies are still planning for growth. Those 58% of firms said they expect, on average, growth of 26% of their current annual turnover in the next twelve months, up from the 49% who expected an average of 17% growth in the 2016 survey.
Job cuts in the industry are set to start slowing. The number of firms expecting to make cuts within the next year is down from a third to a fifth. More than half of companies said they expect to increase their overall headcount within the next year.
A net balance of 17 per cent of firms said they plan to create jobs in engineering and fabrication; 10 per cent said equipment supply and rental; and nine per cent said multi-discipline services. Headcount was expected to reduce in drilling (net balance of -12 per cent) and subsea work (net balance of –5 per cent).
70% of businesses meanwhile, say that the current business climate had presented opportunities outside of the UK.
“While the blow from depressed oil prices has been severe for the many businesses and individuals impacted by job losses, the oil and gas sector is proving itself to be among one of the most resilient in the UK,” said Stuart White, Bank of Scotland regional director, Mid Markets North of Scotland.
“The expression of confidence in this year’s survey reflects an industry that appears to be turning a corner, with conditions for growth more favourable than they have been in recent times.
“There are still choppy waters to navigate, with political uncertainty at home and abroad, but we remain confident in the sector, and are committed to providing the support it needs as part of our pledge to help Britain prosper.”