THE UK’s underwater engineering industry is set to recruit thousands of people in Scotland over the next three years, according to a major new report.

Industry body Subsea UK’s Business Activity Review for the fiscal year 2018/19 shows the total value of UK subsea output has increased to almost £7.8 billion from £7.5bn in 2017. This represents around 37% of the global market.

While employment figures remain fairly static, rising from 45,033 in 2017 to 45,163, the forecasts for recruitment in the next 12 to 36 months are more promising.

Almost 80% of companies anticipate increasing recruitment, with forecasts suggesting employment in the industry could rise to more than 54,000 by 2022.

The majority of these jobs will be in north-east Scotland, where 63% of the industry is based.

From 2003, when the first Subsea UK Business Activity Review was conducted, the industry has grown year on year, reaching a peak output of just under £9bn in 2013, supporting 53,000 jobs.

However, the sector suffered a sharp decline in 2017 – a knock-effect of the collapse in oil prices, which led to the deferral or cancellation of major projects around the world by oil and gas exploration and production companies.

Neil Gordon, chief executive of Subsea UK, said the latest report suggests the industry is returning to growth after the slump.

He commented: “The last five years have taken their toll on those subsea companies predominantly operating in oil and gas. But the findings in this business activity review reveal that the UK subsea industry has weathered the storm.

“The decline has been arrested with a clear upturn in activity, largely due to an increase in output from subsea SMEs and more activity in renewables, particularly offshore wind.

“The growth projections provided by both the Tier 1 companies and SMEs reveal much greater optimism, due to both the recovery in oil and gas and the opportunities presented by the energy transition.”

Total revenues from renewables have risen from £1.3bn in 2017 to £1.8bn, the Subsea study found.

It states that around 80% of large subsea companies are predicting growth in their revenues from the renewable energy sector, with a fifth expecting growth from the renewables sector by 20% or more. Meanwhile, 70% of subsea SMEs are forecasting growth in exports with 31% expecting to increase their export sales by more than 20%.

Gordon added: “While oil and gas and renewables remain the largest markets for the UK subsea industry, revenues from other sectors, such as wave and tidal, defence, subsea mining and marine science are on the increase and interest in these, along with the emerging aquaculture sector, is growing.

“The drive towards net-zero presents exciting opportunities to develop solutions that accelerate the energy transition, particularly in carbon capture and storage.

“With the largest offshore wind market in the world right on our doorstep, the UK subsea industry must do more to capitalise on the underwater aspects of these developments and use them to showcase our technical excellence to the rest of the world.”

The Business Activity Review was published ahead of Subsea UK’s flagship annual event, Subsea Expo. The three-day conference and exhibition opens on February 11 in Aberdeen.