Subsea Sector in UK Suffers on Major Revenue Plunge
A research by industry body, Subsea UK, has found that, 90% of surveyed companies in the UK’s subsea industry have in the last 18 months seen sales drop by 30-50% or more.
Of those, 28% have lost half their revenues with sales decreasing by 50% or more, while close to 6% reported no impact on sales and almost only 4% have seen an increase in revenues.
Around 80% felt that the financial institutions have lost faith in the sector. However, only 5.7% were looking to refinance and 7.7% are actively seeking new investment.
According to Subsea UK, almost 70% of companies surveyed were not actively recruiting and 28% were recruiting less people than they were in 2015. More than 20% of respondents said that they were still employing apprentices to support their business, however recruitment on the whole has dropped, with only 8% of companies reporting that they are looking to employ more people than they were 12 months ago.
Subsea UK chief executive, Neil Gordon, said: “The decline in oil price and subsequent industry-wide downturn has seen a massive reduction in CAPEX and OPEX budgets worldwide which have impacted on the subsea sector where we are seeing job losses and the collapse of companies, putting the UK sector’s enviable world-leading position under threat.
“The findings from our survey underline the negative impact on revenues and recruitment but they also reveal positive signs of the sector adjusting and adapting to the lower for longer oil price environment which will ensure we are well-placed for the future.”
Nevertheless, some 80% of respondents are said it hope to drive growth by increasing overseas sales and exploring new markets with a focus on the Asia, the Middle-east, North America and Africa. Other countries of interest are Australia, China, Brazil and Norway.
Gordon added: “Thankfully our survey shows that subsea companies are increasing their export efforts, exploring new geographic markets where their services and technology are in demand.”
Almost 80% of respondents are still investing in new technology and see this as an area of focus in the long-term to secure future growth.
Specific technologies, which will have most impact in the future, mentioned by respondents were subsea processing and storage, condition monitoring / inspection, repair and maintenance technologies, decommissioning technologies, data gathering and interpretation technologies.
Subsea UK’s 300 members, which represents the majority of the subsea companies in the supply chain, were involved in this survey.