Subsea companies across the UK are set to grow by 20% or more in 2013, with some companies anticipating more than 50% growth.
A survey of Subsea UK members revealed that 100% of firms are predicting significant growth in the next 12 months. Almost half expect to grow by 30% and a third by more than 50%.
Almost 90% of those surveyed saw turnover and profits rise in 2012 with over half reporting growth of 20% and a fifth reporting more than 50% growth.
The key drivers for growth were identified as a sustained high oil price, an increase in global demand and the introduction of new technology and innovation which are leading to more developments becoming viable.
The fastest growing segments in subsea are inspection, repair and maintenance, integrity and reliability, decommissioning and offshore wind.
Neil Gordon, chief executive of Subsea UK unveiled the findings at Subsea 2013, Europe’s largest subsea conference and exhibition. Commenting on the survey, he said: “Subsea continues to be the unrecognised jewel in the crown of British industry. The sector is one of, if not the, fastest growing in the country and these findings will come as no surprise to the oil and gas industry as whole. Several respondents anticipate growing by over 75% in 2013 and many of our small, entrepreneurial companies focused on niche products and services are set to double or treble in size.”
Subsea UK represents the subsea industry which generates £6billion in revenues and supports 50,000 jobs. The industry body has over 250 members from the entire supply chain across the country.
The biggest challenge facing the sector is recruiting and retaining skilled people with 88% citing this as their foremost constraint. Other challenges reported by 15% or more respondents were access to finance and working capital in particular, finding suitable premises, controlling costs and managing growth.
Around 80% felt that the UK was still the world-leader in subsea but 12% warned that competition was becoming increasingly fierce and other countries like Norway and the United States were challenging that position.
Several respondents felt that the UK’s position is threatened by lack of support and investment in the development of new technology by the Government and one or two felt that countries such as Norway, were pushing forward due to investment in new technologies by the oil majors.
The main international markets for UK subsea companies are Norway, Brazil, United States, South-east Asia, Australia, West Africa and the Middle-east. Respondents were asked to rank their overseas markets in order of priority. Norway came out top with 25% of those surveyed indicating it was their first focus over the next few years, followed by the US (24%) and then Brazil (20%). Less than 12% said that the UK North Sea was a priority.
“This underlines the increasing importance of overseas markets,” added Mr Gordon. “Well over 50% of UK subsea output is already exported and that is set to increase as the global market expands and our companies seek to build on the UK’s reputation in subsea.
“Subsea UK is working hard to assist companies break into new markets and the international delegations led by UKTI from various countries at today’s event will prove invaluable to many of our members.
“However, there is a stark warning in the survey from members increasingly concerned about the UK’s competitive edge. With other countries receiving significant support and funding from their Governments for the development of new technology, we risk losing out.”