LIFE is looking a good deal brighter for Weir Group than it did two years ago.
The Glasgow engineering giant suffered badly after crude prices began their precipitous plunge in late 2014. Its exposure to the US shale gas industry, once a source of rapid growth, suddenly became problematic when oil prices dropped. Having peaked at around $114 in the middle of 2014, they had sunk to below $30 a barrel at the start of 2016.
With the oil price in the doldrums, and fracking activity plunging, Weir was forced to take radical action. As many as 2,000 jobs were shed, reducing its global headcount to around 13,000.
The downturn, as has been typical of oil prices in recent decades, has proven to be cyclical. As the oil price has mounted a gradual recovery, and fracking activity in North America has surged back, so too have Weir’s fortunes. After reporting signs of improving orders from the US industry throughout last year, its full-year results confirm the recovery is now in full swing. So much so, in fact, that Weir is hiring again on the other side of the Atlantic.
And it is not just in oil and gas where Weir has identified growing momentum. Chief executive Jon Stanton was equally upbeat about the prospects for its minerals division, which feeds into industries such as mining, chemicals and waste water treatment around the world. That stems from an anticipated increase in investment in greenfield developments after years of decline, as well as a notable rise in demand for copper, sparked by the emergence of electrical car manufacturing.
That Weir does not appear to be unduly concerned about Brexit is another factor in its favour, though it would prefer that customs and trading arrangements remain as close to what they currently are after the UK exits the EU. Such is the uncertainty around the Brexit talks, however, that is perhaps the least concrete variable the company – or any other business – can currently count on.
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