SMEs operating in the UK’s £7.8-billion subsea supply chain are cautiously optimistic about the next six to twelve months, according to the findings published today by the industry body Subsea UK.
Subsea UK recently surveyed its smaller member companies to find out how they were dealing with the fall-out from COVID-19.
Almost 75 per cent of respondents do not anticipate making redundancies in the near future.
Also, 56 per cent are fairly optimistic about the next six to twelve months.
However, almost 23 per cent of respondents are making redundancies with only 3.5 per cent actively recruiting.
The last business activity review in 2019 reported that the subsea industry in the UK employed 45,000 people.
The top three priorities for subsea SMEs at this time are the health and well-being of employees, cash-flow and lack of visibility over project work and their order books.
Respondents also revealed that their target markets remain unchanged as a result of the global pandemic. In terms of geography, Europe remains a key market, followed by Gulf of Mexico, Asia Pacific, and the Middle East.
Oil and gas is still the largest market for the subsea industry.
However, diversification into other areas of underwater engineering is more important than ever.
Offshore renewables account for almost 25 per cent of subsea revenues with growing income from aquaculture, defence and subsea mining.
Subsea UK’S chief executive, Neil Gordon, said:
“Although there have been major redundancy programmes across the tier one companies, the situation among SMEs – who make up the bulk of the subsea supply chain – does not appear quite so gloomy. However, this cautious optimism must be put in context with the overall bleak outlook we are seeing.
“The subsea supply chain has a pivotal role to play in the energy transition and the green recovery.
“Given the fragility of subsea companies due to low margins, lack of resources, cash and investment and, in many cases, considerable debt as a result of the last protracted downturn, it’s vital that we do everything we can to protect the supply chain so that we are not constrained when it comes to delivering the green recovery.