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.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here