Oil and gas sector outperforming the rest of the Scottish economy
Tuesday, Nov 06, 2012
The oil and gas sector is continuing to outperform the rest of the Scottish economy, according to new survey findings published today (5 November 2012).
The 17th Aberdeen & Grampian Chamber of Commerce oil and gas survey reveals that activity and confidence in the sector continues to rise with a strong demand for employment and increasing investment on the part of both operators and contractors. Involvement in decommissioning work and renewables, however, remains limited.
Recruitment and skills shortages continue to be major issues for a highly skilled industry in which the average wage is currently around £64,000, more than double the national average wage of around £25,000. While the national average has risen by just 1.5% over the past year the survey shows that in the oil and gas sector companies have generally been paying increases of between 5% and 12% to attract or retain staff.
The global outlook for the sector in 2013 remains positive, although continuing political and economic uncertainties and the development of unconventional gas and oil production may change the shape of the international energy market in the medium term.
Sponsored by law firm Bond Pearce and independently conducted by the Fraser of Allander Institute, the survey is carried out twice a year and draws on responses from oil and gas operators and contractors to identify trends in areas including investment, exploration and employment. The findings are used to identify how the performance of this sector might impact on the wider business community.
Kenny Paton, Oil and Gas Partner at Bond Pearce, Aberdeen, said: "The potentially very positive future for the industry is clearly illustrated by this survey which also highlights the considerable challenges of skills shortages and costs.
“The big hopes for the future, the decommissioning and fledgling offshore renewables industries, have not yet made too much of an impact and the focus is still firmly on oil and gas activity which seems to have been stimulated by positive fiscal moves. Salaries in the sector continue to soar as companies poach expertise from one another to try to plug the considerable gap, particularly in the 35-49 year age group with eight to 15 years of experience.
“As the UK competes globally for investment it is important that issues like skills, salaries and the continuing uncertainty over decommissioning are not allowed to kill the goose which is laying the golden egg," said Mr Paton.
Robert Collier, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: “The oil and gas industry is a vital element of the Scottish and UK economies. Our latest survey findings give considerable cause for optimism, including new investment and activity. However, it also highlights the continuing issue of skills shortages which is driving staff cost increases across the industry. In the longer term, significant new blood will be required to combat the cycle of companies recruiting experienced staff from each other.
“Whilst the outlook for 2013 also looks positive the industry will surely keep a weather eye on global demand factors and issues closer to home, including the Scottish independence referendum in 2014, when considering their longer term plans. North Sea oil and gas is a significant topic in the referendum debate and we will see how the policy proposals surrounding it feed through into business planning in the sector in subsequent surveys,” said Mr Collier.
Source: Aberdeen & Grampian Chamber of Commerce
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