While remaining very concerned about the future, there has been a slight rise in optimism in the North Sea oil and gas industry, with respondents returning a score of minus 25 on a -50/+50 scale – an increase of two points from minus 27 reported in the Business Sentiment Index in the second quarter of the year.
As a regular survey of around 1,500 representatives from both operator and contractor companies, the Business Sentiment index typically elicits a 10-15% response rate.
It measures a number of economic indicators, including business confidence, activity levels, business revenue, investment and employment with a higher rating (above zero) indicating a more positive outlook and a lower rating (below zero) expressing a more negative opinion.
Oonagh Werngren, Operations Director, Oil & Gas UK, said: “While the overall index remains in negative territory for the fifth quarter in a row, there is a slight improvement in mood for the second quarter in succession.
“Respondents cite the positive impact of efficiency initiatives, such as improved management of inventory levels, business process reviews plus engaging with the workforce for ideas for efficiency improvements, as reasons for optimism. Some respondents also indicated a positive outlook regarding potential opportunities in the decommissioning market.
“The slight rise in optimism, however, is counter-balanced by a large number of companies expressing concern about future activity levels, with 55% reporting lower activity than the second quarter of 2015.
“Job losses continue to be a matter of concern to the majority of respondents, with just over 60% indicating that headcount has already been or will be reduced.”
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