The UK oil and gas industry remains fragile, but the outlook has improved in the second quarter, according to Oil & Gas UK.
Pessimism has moderated, according to the Business Sentiment Index, a tool to capture a quarterly snapshot of the industry mood. It measures economic indicators such as business confidence, activity levels, business revenue, investment, and employment (OGJ Online, Aug. 6, 2014).
“While the overall index remains in negative territory for the fourth quarter in a row, this slight improvement in mood is the first upward movement we have seen since first-quarter 2013,” said Oonagh Werngren, operations director.
Respondents returned a score of -27 on a -50/+50 scale, up four points from -31 in the first quarter.
Werngren said a large number of companies are concerned about a further decline in activity, the challenge of managing costs, and how these factors will impact employment. But a few respondents have reported higher activity than in the first quarter, which may be due to preparations for annual summer maintenance programs.
She said another reason for the modest improvement is that a number of companies have already put significant effort into tackling cost and improving efficiency, and are beginning to see the impact.
While contractors cite uncertainty regarding future orders, they also highlight improvements in how their clients engage them to identify cost-effective ways to address the current business climate.
“For small to medium enterprises, the main issue is ensuring they are paid in a timely manner, a principle enshrined in the industry’s Supply Chain Code of Practice—a key tool for the industry to help ensure its cost base remains competitive,” Werngren said.