ABERDEEN, UK – Optimism is rising over prospects for the UK’s supply chain, according to a recent survey by industry association Subsea UK.
The 300 members participated in questionnaires last year in early July and late November on business prospects, given current global conditions.
In November, 80% of respondents did not anticipate making redundancies in the near future, with only 12% planning to make staff redundant, and 8% undecided.
This was higher than in July, and 63% of companies reported being fairly optimistic about the next six to 12 months, compared to 56% in the earlier survey.
Fewer UK subsea companies now believe the recession will last for the next 12-18 months, with 13% expecting the recovery to pick up pace.
However, cash-flow is a growing concern, and was the main priority of 25% of respondents in November. Another worry is the lack of visibility on projects and project deferrals, with some also concerned with client behaviors.
Half of the respondents said their target markets over the five-month period to November. Europe scored highest for 54% of respondents, followed by the Gulf of Mexico, Asia/Pacific, South America, and the Middle East.
And although oil and gas remains the dominant market for the subsea industry, activity in offshore wind has risen, with 28% of companies now prioritizing this sector.
Subsea UK’S chief executive, Neil Gordon, said: “It will be interesting to see how the new national lockdown impacts on the industry which, despite the more positive mood, is still fragile due to low margins, lack of resources, cash and investment and, in many cases, considerable debt as a result of the last oil and gas downturn.
“The UK government’s recent Energy White Paper presents some exciting opportunities for our sector which has a key role to play in the energy transition and the green recovery.
“Along with other industry bodies and relevant organizations, we will focus our efforts on working with government to ensure the subsea supply chain is at the heart of the country’s energy strategy and measures are in place to ensure it can maximize the opportunity.”