Oil & Gas UK’s Business Sentiment Index for the second quarter of 2015 published Wednesday shows that while the UK oil and gas industry remains fragile, the companies’ outlook is improving, the representative organization for the UK offshore oil and gas Industry has said.
According to Oil & Gas UK, pessimism has moderated with respondents returning a score of minus 27 on a -50/+50 scale, up four points from minus 31 reported by the survey in the first quarter of the year.
As a tool to capture a quarterly snapshot of the industry mood, the Business Sentiment Index measures a number of economic indicators including business confidence, activity levels, business revenue, investment and employment with a higher rating (above zero) indicating a more positive outlook and a lower rating (below zero) expressing a more negative opinion.
Oonagh Werngren, Oil & Gas UK’s operations director, said: “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 Q1 2013.
“On one hand, 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. On the other hand, a few respondents have reported higher activity than in the first quarter which may be due to preparations for the annual summer maintenance programmes when levels traditionally increase on the UK Continental Shelf.
“Another reason for the modest improvement in mood is that a number of companies have already put significant effort into tackling cost and improving efficiency and are beginning to see the impact of these efforts. While contractors cite uncertainty regarding future orders as a concern, they also highlight improvements in how their clients engage with them to identify cost–effective ways to address the current business climate. For small to medium enterprises (SMEs) 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.”