Despite continued economic uncertainty, the outlook for the oil and gas industry has improved since last year and investment intentions have strengthened significantly, according to a new industry survey conducted by the Economist Intelligence Unit (EIU).
Big Spenders: the outlook for the oil and gas industry in 2012 is the EIU's second annual industry barometer. The survey asked nearly 200 oil and gas executives for their views about industry trends over the next 12 months.
Key findings from the research, which was commissioned by GL Noble Denton, are as follows:
· Industry optimism is high and rising: the share of industry executives describing themselves as either highly or somewhat confident about the next 12 months has risen from 76% last year to 82% this year.
· Industry confidence varies significantly between regions: In North America 90% of respondents describe themselves as highly or somewhat confident about the next 12 months; in Asia-Pacific the figure falls to 81%; and in Europe it drops to 70%.
· Investment intentions are significantly stronger than last year: reflecting rising optimism about the future, 63% of executives worldwide say they plan to invest either somewhat more or substantially more over the next 12 months. That number is up from 49% on last year.
· Rising operating costs are seen as the key barrier to growth for the second year running. When questioned in detail about costs, more than 50% of respondents say that they expect wages to increase over the next 12 months. The second-biggest concern is the rising cost of contractors, with 54% expecting costs to increase, compared with only 11% anticipating a decline.
· Skills are a growing concern: Last year, worries about skills came fifth on our list of barriers to growth over the next year and were identified as a top-three growth barrier by only 25% of respondents. This year, the issue has shot up to second on the list, with 34% of respondents identifying it as a top-three issue.
Chris Webber, Senior Editor at the Economist Intelligence Unit, said: "The high level of industry confidence is striking. Given the slowdown in the growth of demand for both oil and gas during the second half of 2011, we might have expected industry confidence to have taken a knock. The fact that optimism is so high is probably partly down to the anticipated growth in demand for gas, particularly in Asia where the demand for liquefied natural gas has increased significantly. Separately, the palpable concern about skills is a clear sign that talent shortages are becoming more acute in the industry."
Big Spenders: the outlook for the oil and gas industry in 2012
is available free to download at:
http://www.managementthinking.eiu.com/big-spenders.html
Press enquiries:
Joanne McKenna, Press Liaison, +44 (0)20 7576 8188; joannemckenna@eiu.com
Chris Webber, Senior Editor, +44 (0)20 7576 8239; chriswebber@economist.com
About the research
The research was conducted by the Economist Intelligence Unit and commissioned by GL Noble Denton. The findings are based on a survey of 185 oil and gas industry executives conducted in October and November 2011 and a series of expert interviews conducted in between October and December 2011.
About the Economist Intelligence Unit
The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com or follow us on www.twitter.com/theeiu
The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 650 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.
About GL Noble Denton
GL Noble Denton, part of the GL Group, is a leading independent provider of technical services and software to the oil and gas industry. The company works with some of the sector’s best-known corporations to provide a wide range of services across the lifecycle of their assets.
GL Noble Denton’s expertise spans upstream operations, such as on- and offshore exploration, production and delivery storage; midstream import, storage and processing; and downstream distribution. With over 3,500 employees and a presence in more than 80 countries, GL Noble Denton plays a key role in helping to design and develop, operate and execute, and assure some of the industry’s most innovative solutions.
For more information, please visit: www.gl-nobledenton.com
