'˜Cautious ­optimism' as Aberdeen economy rebounds

Aberdeen's economy is showing signs of 'cautious ­optimism' after three years of oil-related misery, a report suggests.

Grant Thornton said there were 'more glimmers of light' emerging in Aberdeen. Picture: Craig Stephen

Business and financial adviser Grant Thornton said the prolonged low oil price had driven “significant change” within Scotland’s energy ­sector, with businesses forced to slash costs, increase efficiency and evaluate how they interact with each other.

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Industry body Oil & Gas UK estimates that more than 120,000 people have lost their jobs in the industry in the last three years, primarily in the North-east of Scotland, with many oilfield services businesses bearing the brunt of delayed or cancelled projects, growing margin pressures and a lack of visibility over future orders.

However, a more positive outlook for oil prices and a number of large deals in the sector appear to be restoring some momentum, the report noted.

Barry Fraser, Grant Thornton’s managing director in Aberdeen, said: “There are undoubtedly many challenges that still lie ahead for the oil and gas sector in Aberdeen, but we’re seeing some ­glimmers of light after a prolonged period of uncertainty.

“Many north-east businesses are no longer focused on pure survival and are seeing an increase in tender activity and new opportunities, ­particularly overseas.”

Ian Knott, director at the Grant Thornton practice in Aberdeen, added: “It’s reassuring to see the sector and the wider region taking a more positive view of the future, but businesses will also need to keep a close eye on cash resources as they return to growth, as this is a period where we see many business failures due to companies overstretching themselves.”