Only 5% of oil and gas companies think Brexit will have a positive impact on the UK Continental Shelf, according to a new survey.
The industry report found half of firms anticipate that Britain leaving the EU will have no effect, while the remainder predict it will have a detrimental effect on the sector.
The 29th Aberdeen & Grampian Chamber of Commerce Oil and Gas Survey found that firms have concerns about the impact and additional costs that Brexit will have on their trade and export activities, and that it could make it more difficult and expensive to do business in Europe.
A number of firms stressed concerns over EU employees leaving the UK, or firms not being able to attract new staff from Europe.
Almost half think that Brexit will have a negative effect on their ability to attract talent to their organisation, while almost half anticipate no impact.
However, away from the Brexit issue, the study found that workforce recruitment is on the rise among oil and gas contractors in the UK Continental Shelf (UKCS) as business confidence reaches its highest level since 2013.
The report, carried out by the Chamber of Commerce in partnership with the Fraser of Allander Institute and KPMG, found that 21% of firms have increased their total UK-based workforce by more than 10% in the last 12 months, with 33% anticipating this trend will continue in 2019.
Looking further ahead, 34% of firms expect their headcount for contract staff to rise over the next three years.
Almost two-thirds expect the level of core staff to increase and only 5% expect a fall over the same period.
Moray Barber, partner at KPMG, said: “Overall, this survey tells us that change is afoot and the direction of travel is positive, but there continue to be potential traps along the way, not least the impact of Brexit, a potential impending skills gap and environmental and climate change risk.
“We believe the industry is alive to these challenges as we are seeing our clients develop growth strategies and scenario-planning to deal with the risks these present, as well as driving forward their technology and innovation agenda to become disruptors in their own right.”
The survey, to which 115 companies responded, shows growing business confidence across the board, with 63% of contractors more confident about their current UKCS activities compared with the previous survey, the highest level since 2013.
It found that the industry appears to be setting its sights on growth opportunities, with 58% of firms forecasting an increase in profits in 2018 and a net balance of 50% of firms anticipating an increase in the value of production-related activities.
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: “Contractor optimism not only remains high for UKCS operations but is continuing to grow for international markets too, where we are now seeing the highest figure since autumn 2006.
“It is vital, however, if we are to achieve the ambition of creating a world-class all-energy hub here beyond the operational phase of the UKCS, that supply chain companies continue to think about internationalising rather than simply re-filling order books with emerging contracts on their own doorstep.”