The UK’s underwater engineering industry is expected to create up to 9,000 jobs over the next three years, predominantly in the north-east of Scotland, new research suggests.
Subsea UK’s Business Activity Review has forecast that employment in the industry could rise from 45,000 to more than 54,000 by 2022 as output and optimism rebound after a sharp decline in 2017.
Almost 80 per cent of companies anticipate ramping up recruitment, with the majority of jobs expected to be created in north-east Scotland, where 63 per cent of the UK industry is based.
North-east England, where the subsea industry is worth around £1.5 billion and supports 15,000 jobs, will also see a marked rise in recruitment.
The report found that the total value of Britain’s subsea output increased to £7.8bn in the fiscal year 2018/19, up from £7.5bn in the previous year. This represents 37 per cent of the global market.
However, exports accounted for just 43 per cent of total UK output in 2019, down from 55 per cent a year earlier, as the review forecast a recovery in overseas activity.
'Increased output from SMEs'
Since Subsea UK started its annual review in 2003, output has peaked at just under £9bn in 2013. The industry body claims the steep drop reported in 2017 was a direct result of the collapse in oil price which led to the deferral or cancellation of major projects by oil and gas exploration and production companies.
Neil Gordon, chief executive of Subsea UK, said: “The last five years have taken their toll on those subsea companies predominantly operating in oil and gas. But the findings in this business activity review reveal that the UK subsea industry has weathered the storm.
“The decline has been arrested with a clear upturn in activity, largely due to an increase in output from subsea SMEs [small and medium-sized enterprises] and more activity in renewables, particularly offshore wind.”
Total revenues from renewable energy have climbed by £500 million to £1.8bn, with the majority of subsea companies predicting further turnover growth in this subsector. One-fifth of subsea firms expect revenues from renewables to rise by 20 per cent or more in the current year.
Gordon added: “As the emphasis on the energy transition continues and the industry sharpens its focus on achieving net-zero targets, there will be huge potential for the transfer of offshore oil and gas subsea expertise to carbon capture and storage, hydrogen and wave and tidal.
“The Blue Economy presents an enormous opportunity for the UK’s subsea industry to bring its proven technical excellence and skilled workforce to the operational developments across all aspects of offshore energy, aquaculture, defence, subsea mining and marine science.”
The review comes ahead of Subsea UK’s flagship three-day conference and exhibition in Aberdeen on 11 February.