Levels of Optimism in the UK Continental Shelf 'Bounce Back'
Improvements in oil and gas contractor confidence on the UK Continental Shelf (UKCS) suggests some businesses are seeing signs of recovery, according to an industry report released today.
The findings of the 26th Oil and Gas survey, conducted by Aberdeen & Grampian Chamber of Commerce, in partnership with the Fraser of Allander Institute, reveal that 38 percent of contractors surveyed are more confident about business on the UKCS compared to just 10 percent who are less confident.
“The result that we find in this survey is levels of optimism in the UKCS have bounced back somewhat,” an AGCC spokesperson said in a video posted on the group’s Twitter page Tuesday.
The numbers represent a significant rise from historic lows six months ago when only 12 percent of contractors were more confident and 47 percent were less confident. It’s worth noting, however, that 52 percent reported no change in their outlook, indicating that challenges still remain in the marketplace.
More than half (52 percent) of contractors and operators/licensees believe that the sector has already reached the bottom of the current cycle and 26 percent consider it will do within the next year, according to the report.
When asked what position businesses expect to be in by January 1, 2018, 42 percent expect their business to be growing, up from 16 percent who expected to be growing by January 1, 2017, while only 2 percent anticipate further decline.
Contractors anticipate increasing headcount by an average of 0.8 percent over the next 12 months and a higher percentage of this group (26 percent) expects to increase investment spend over the next two years rather than reduce it (19 percent). Investment rises are limited to certain areas, however, and cannot be seen consistently across all parts of the industry.
“We’re seeing some signs of recovery for the industry and the global outlook is certainly more positive than it was six months ago but it is clear that most companies are still suffering,” James Bream, research and policy director at Aberdeen & Grampian Chamber of Commerce, said in an AGCC statement sent to Rigzone.
“We are hopefully stepping into a more prosperous period in due course but that is not upon us for now. It seems clear that many believe that we won’t return to previous levels of activity and that perhaps we shouldn’t call this a downturn. This isn’t a ‘new norm’, it is just normal,” he added.
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