There is a growing gap in business confidence between North Sea energy companies and the wider and Scottish UK economies, according to new research form accountancy firm KPMG.
The 2019 KPMG Outlook shows less than half of UK chief executives are confident about the prospects for global economic growth over the next three years.
The figure marks a significant fall of 34 percentage points year on year and sits in stark contrast to evidence of increased investment and growth planning among the north-east's oil and gas operators and contractors.
Earlier this month, data from the 30th Oil and Gas survey, conducted by Aberdeen & Grampian Chamber of Commerce – in partnership with the Fraser of Allander Institute revealed 45% of contractors had already increased investment spending in the UK Continental Shelf in the past 12 months, while 40% of firms have increased their total workforce in the past year.
Martin Findlay, senior partner at KPMG UK in Aberdeen, said: “The latest oil and gas survey reflected changing fortunes in the north-east economy, driven in part by an increased investment in talent and infrastructure in the energy sector.
“But the data came with something of a health warning. We were starting from a low base, after a sustained downturn.
“Taking that into account, the latest global CEO Outlook research creates some cause for concern for the energy sector.
“To some extent, the industry has always operated in its own cycle, but it would be foolhardy to ignore wider increased uncertainty and dwindling global confidence in the UK and global economies.”
More than 1,300 CEOs and senior execs were questioned for the 2019 KPMG CEO Outlook, including 150 in the UK.
While much of the data reflected deep-rooted concerns over geopolitical stability, there were some optimistic findings.
While a majority of CEOs in EU states said they were now less likely to invest in the UK, chief executives from the US, China and Japan – the UK’s top investor and the world’s second and third biggest economies – said they were, on average, now more likely to look for investment opportunities in a post-Brexit Britain.
Findlay added: “The mixed picture we’re seeing in our analysis, in some ways, adds to the sense of confusion that all business leaders are facing as they grapple with an uncertain time ahead.
“But, the focus for the oil and gas sector now, more than ever, must be on collaborating as one group to tackle shared obstacles to growth – from the talent and skills gap, to innovation, diversification and responding to the growing international issue of climate change.
“Whilst uncertainty over the nature and timing of Brexit is less than helpful, it will not have as great an impact on oil and gas as it will in other sectors.”
