UK’s ‘world-leading’ underwater industry hits $11.7b but project surety vital to sustain growth

The UK’s underwater industry has grown from £8 billion to £9.2 billion (US $11.7 billion) in the last 12 months and now supports over 51,000 jobs, according to new research from Global Underwater Hub (GUH). The fast-growing industry has both the capacity and capability to accelerate the global energy transition but only if project certainty is secured, the agency said in a report.

According to the 2024 Business Survey from the leading trade and development body for the UK’s underwater industry, there is a more positive assessment of supply chain capacity and, overall, market prospects remain high driven by the wide range of opportunities across all its markets, but most notably, in offshore energy.

However, confidence in whether or when projects will be delivered has declined – 62% believe that project timelines will be missed, the Global Underwater Hub said.

Potential for the offshore industry

The lack of project surety and a “concerning” uncertainty about timelines is making it tough for companies to tie business and investment plans back to Final Investment Decisions (FID), tender awards and project sanctions.

Despite the challenges the industry is continuing to grow, with 57% of respondents confident that roadblocks to success can be overcome. However, only 11% believe there is enough visible commitment to projects in the form of appropriate policy and finance. The lack of positive market signals is prompting UK companies to consider relocating overseas.

To counteract this, GUH has called on the UK Government to recognise the scale and potential of the underwater industry to generate wealth, jobs and exports and ensure its industrial strategy provides what is needed to reach that potential.

“Our world class underwater supply chain rightly sees itself as having the necessary, leading capability to harness the opportunities across all its markets, particularly in offshore energy,” said Neil Gordon, GUH chief executive.

“It is closing the gap towards having the necessary capacity to meet demand but does not have sufficient confidence in project timelines and returns to trigger the necessary investment,” he added.

Strong market signals

According to Gordon, if these businesses are to invest and plan for the coming decades, they need strong market signals and commitment at various stages of a project and market development. “Aligned policy, timely consenting, sensible financing, concrete project timelines and clear supply chain investment are imperative to move projects from the drawing board to the seabed,” he said.

While 80% of respondents to the survey said they have confidence in global underwater markets, with significant overseas opportunities for companies headquartered in the UK, GUH warns that exports could transform into wholesale moves abroad, significantly reducing the domestic footprint.

“The UK has cultivated a world-leading underwater sector with a supply chain that continues to report robust growth and is ready to support projects around the world. But we risk losing these organisations without an industrial strategy which supports both a just transition and our ability to take a world-leading role in new markets by leveraging our supply chain’s excellence across most project lifecycles,” Gordon said.

“With an industrial strategy that encompasses multiple underwater markets and recognises that most supply chain companies will service a mix of these markets, we can sustain and grow the capacity and capability of the underwater industry through the transition in areas where the UK has a global competitive advantage,” he added.