Subsea sector sees revenues soar 40%

Britain's booming subsea industry, dominated by companies based in North-east Scotland, has witnessed a 40 per cent growth in revenues to £5.9 billion over the past three years, despite the recession, it was revealed yesterday.

Almost half of the firms operating in the sector are forecasting continuing growth of at least 20 per cent - or some 1.2bn - over the next three years, potentially creating up to 10,000 jobs.

The growing importance of the subsea industry to Britain's economy was revealed in a new independent survey, commissioned by Subsea UK, the main trade body - published on the opening day of Subsea 2011, the industry's annual showcase at the Aberdeen Exhibition and Conference Centre.

Alistair Birnie, chief executive of Subsea UK, admitted he had been "gobsmacked" when he saw the results of the survey. It showed that business from both UK and overseas developments by UK subsea companies had grown to 5.9bn from about 4.3bn in 2007. Britain now accounts for a third of the 18.9bn global market, the study showed.

Sales to UK-based operators have increased by 24 per cent in the last three years to 2.6bn while exports have risen from 2.2bn to 3.3bn - a surge of 50 per cent. Birnie said: "These findings underline the huge economic significance of the subsea industry to the UK. It is highly impressive that despite the economic downturn, subsea businesses in the UK have grown by almost 40 per cent and the sector is now larger than ever, commanding a third of the global market.

"Much of the growth has been driven by exports which are increasingly important to the health of the sector."

Birnie said that, if a forecast of 8 per cent year-on-year growth can be achieved, the sector would be worth 7.5bn in revenues by 2014.

But he warned that the survey had also disclosed concerns among subsea companies about becoming involved in marine renewable projects, such as offshore wind farms and tidal energy. Renewables currently account for 420 million of the turnover of UK-based subsea companies.

"There is a lack of confidence in the renewables market that has certainly come through over the course of this study," Birnie said.

"The sentiment seems to be very much 'let's stick to going after oil and gas business in preference to renewables which we are not very sure about'."

According to the survey, Scotland is now home to 46 per cent of the UK's subsea industry with 38 per cent of the companies based in Aberdeen and Aberdeenshire.

About 350 firms are located across Scotland with 290 in Aberdeen and Aberdeenshire. The industry currently employs 40,000 people directly and a further 10,000 indirectly.

Key export markets for UK subsea companies are Europe, notably Norway, west Africa, North America and Asia. Future export growth is anticipated to come primarily from South America and Africa.