RUSSELL BORTHWICK
AFTER fifty years as Europe’s oil capital Aberdeen is understandably inextricably linked in many people’s minds with the oil and gas industry.
The fortunes of our regional economy have for many decades been influenced by the rise and fall in the price of a barrel of crude and while significant work has – and continues to be – successfully undertaken to diversify our offering and ensure we remain a major economic driver for Scotland long after North Sea oil has gone, there has been cheering news recently for the thousands of businesses the length and breadth of the UK currently engaged in exploration and production activities.
It has been almost four years since the major downturn in oil price and, although the recovery from this remains patchy, our latest survey reveals that confidence levels are continuing to grow.
During the six months to April 2018, almost two thirds of contractors reported being more confident about the current business situation compared to a year ago and the highest figure recorded since spring 2013.
Based on the fact that 41% of businesses are now working at or above optimum levels, almost three quarters of firms are forecasting profit increases in 2018 and seven in 10 firms expect to see a further increase in business optimism surrounding the UK sector in the months to come, it appears businesses are optimistic that this positive trend will continue into the year ahead.
One of the most significant changes however is around optimism in the North Sea. Over the last couple of years the survey has showed us that firms have been more focussed on international markets for business growth. However the latest set of results tells us that there is now a rebalancing taking place, with the UK Continental Shelf becoming just as important again in terms of securing future growth.
Any city region synonymous with a particular industry faces challenges in terms of public perception, long-term prosperity and diversity. This good news for the oil and gas industry doesn’t take our eye off the ball with regards to the work being done to create a renaissance in the North-east. If anything, it is a reminder that we have the strength, the tools and the will to continually reinvent ourselves as a serious player on the global stage.
Russell Borthwick is chief executive of Aberdeen & Grampian Chamber of Commerce.
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