Some 28% of UK-based subsea industry firms have seen their sales drop by 50% of more since the start of the oil price collapse, according to a snapship survey by industry body Subsea UK.
Yet, almost 80% of those surveyed said they were also still investing in new technology and see this as an area of focus in the long-term to secure future growth.
The majority of respondents believe that technologies which lower cost and risk, while increasing efficiency are vital for the future. Specific technologies, which will have most impact in the future, mentioned by respondents were subsea processing and storage, condition monitoring / inspection, repair and maintenance technologies, decommissioning technologies, data gathering and interpretation technologies.
According to the survey, around 90% of respondents had seen their sales decrease in the last 18 months. Of those, 28% saw sales drop by 30-40% and a further 28% had lost half their revenues with sales decreasing by 50% or more.
Just under 6% reported no impact on sales and almost 4% had seen an increase in revenues.
Around 80% felt that the financial institutions have lost faith in the sector. However, only 5.7% were looking to refinance and 7.7% were actively seeking new investment.
Almost 70% of companies surveyed were not actively recruiting and 28% were recruiting fewer people than they were in 2015. More than 20% of respondents said that they were still employing apprentices to support their business, however recruitment on the whole has dropped, with only 8% of companies reporting that they are looking to employ more people than they were 12 months ago.
According to Subsea UK, the subsea sector is worth about £9billion and employs around 50,000 across the UK. Subsea UK’s 300-strong membership, which represents the majority of the subsea companies in the supply chain, were surveyed to provide evidence-based insight into the impact of the oil and gas downturn.
Subsea UK CEO Neil Gordon said: "The decline in oil price and subsequent industry-wide downturn has seen a massive reduction in capex and opex budgets worldwide which have impacted on the subsea sector where we are seeing job losses and the collapse of companies, putting the UK sector’s enviable world-leading position under threat.
"The findings from our survey underline the negative impact on revenues and recruitment, but they also reveal positive signs of the sector adjusting and adapting to the lower for longer oil price environment which will ensure we are well-placed for the future.”
Some 80% of the survey respondents said they hope to drive growth by increasing overseas sales and exploring new markets with a focus on Asia, the Middle-east, North America and Africa. Other countries of interest are Australia, China, Brazil and Norway.
More than 44% of respondents said that the lower for longer oil price environment has led to the industry becoming more receptive to new ways of working and adopting different techniques and innovations.