Subsea UK has revealed in its latest business activity review that the industry is generating annual revenues of £7.5 billion, compared to £8.9 billion in 2014.
The body which represents the country’s subsea industry also revealed that, despite the downturn in oil and gas, the subsea sector still supports around 45,000 jobs in the UK. This compares to around 53,000 three years ago.
Exports account for over half (55%) of annual revenues, while sales in offshore wind have risen from £770 million in 2014 to £1.3 billion today.
Subsea UK, whose 300 members make up the bulk of the country’s subsea supply chain, conducts regular reviews of the sector. The body’s chief executive, Neil Gordon, said: “It’s clear that, at the time of our last review, the industry was still riding the crest of a wave with revenues of almost £9 billion. The oil price crash and subsequent, prolonged downturn globally which led to the deferral or cancellation of major subsea projects, particularly in deepwater, has had a material impact on revenues and cost around 8,000 jobs.
“However, the subsea sector appears to have weathered the storm by increasing exports and diversifying, particularly into offshore wind, where the skills and technology are eminently transferable.”
The largest export markets for the tier 1 subsea companies are Scandinavia, West Africa and the Gulf of Mexico. For SMEs, this picture changes with South East Asia being the primary export market, followed by the Gulf of Mexico and the Middle East, Scandinavia and West Africa, Subsea UK explained.
Respondents expect South east and Central Asia to become more important export markets in the future, along with the Caspian and the Middle East.
Around 80% of large companies are expecting to grow exports in the next three years, with a third expecting export sales to increase by between 10% and 20% and a fifth by over 20%
Meanwhile, 65% of SMEs believe they will increase exports, with the majority anticipating growth of between 10% and 20% and over a fifth anticipating more than 20% growth in international sales.
Gordon added: “Since the eighties, Britain has pioneered subsea technology and expertise and become recognized as the global-leader in subsea. I’m confident we can still claim to lead the way around the world but we still need greater recognition of subsea as one of the UK’s best performing industry sectors to help attract investment and talent and to work collaboratively with government on diversification, internationalization, innovation and skills.”
In 2013/14, Subsea UK estimated there were around 800 companies operating in subsea across the country from the north-east of Scotland to the south-east of England. Around 20% of those have gone into liquidation, merged, been acquired or retreated from subsea operations.