NORTH Sea oil firms are increasingly confident the downturn in the sector has peaked, with a new survey showing three out of five companies believe the industry has already reached the bottom of its current cycle.

In the autumn of 2016, less than one-third (29 per cent) of firms believed the slump had passed its worst point, but the latest research showed 60 per cent now think this is the case.

The survey, carried out by Aberdeen and Grampian Chamber of Commerce (AGCC) in partnership with the Fraser of Allander Institute think-tank and the professional services firm KPMG, also found rising levels of confidence among contractors in the sector.

Looking ahead to the coming year, almost half (48 per cent) of contractors said they were more confident, with nine per cent less confident.

And while 68 per cent of contractors had cut staff in 2016, fewer than a quarter (23 per cent) had to resort to this in 2017 the survey revealed. Forty-seven per cent kept their workforce steady and the remaining 30 per cent increased the number of people they employ.

A total of 95 companies responded to the survey. James Bream, research and policy director at AGCC, said: “The underlying data suggests that rather than an industry with “cautious optimism” we actually see a picture of significant diversity, with some companies buoyant and performing well while others remain fragile.

“It does look like the worst is likely to be over, at an aggregate level, with 60 per cent of firms believing that the industry has already reached the bottom of its current cycle and a further 24 per cent predicting this will happen within the next 12 months.

“When asked what position bus- inesses expect to be in by January 1, 2019, 54 per cent expect their com- pany to be growing while none expect to be declining. This is a vast improvement on the findings from a year ago and indicates that the businesses which have been able to withstand the downturn are seeing a change in their operating environment and are focused on the potential upside.”

Firms were also asked about the effect Brexit could have on their ability to attract staff. In the autumn 2016 survey, 22 per cent of firms reported that Brexit would have an impact, while 54 per cent did not expect it to have any effect.

In the latest research, 33 per cent of firms said leaving the European Union could reduce their ability to hire the best people, with 47 per cent still predicting there would be no impact.

Moray Barber, a partner at KPMG, said: “It is encouraging to see that 60 per cent of companies in this survey believe the industry has already reached the bottom of its current cycle. This indicates a more positive attitude is developing across the industry, but there is still a long way to go to get back to 2013 productivity.”