The offshore crisis is beginning to bite

01 December, 2015

There is no doubt that despite reports of what is widely regarded as a slight muting of growth in UK manufacturing towards the end of Q3 2015, those companies relying upon the off-shore sector are feeling much greater pain as the effects of the low oil price begin to echo down the supply chain.

As the off-shore sector is the second most important industry to the BFPA Hydraulics membership, the current crisis in the off-shore industry is certainly very much on the Association’s radar with a number of BFPA and BFPDA members reporting difficult trading conditions. As we go into 2016 it is clear that we may have a challenging 12 months ahead of us.

It is telling that until recently, (according to Aberdeen City Council), Aberdeen and its surrounding ‘shire’, with a gross value added (GVA) of £31,753 per person, was the most economically productive region in the whole of the UK, outside inner London. Over the past decade, GVA has increased by almost 59 per cent in the region, compared with a rate of 35 per cent on average for the rest of the UK. They were even immune to the major downturn that we all suffered in 2008/9.

Now of-course, we are hearing that the industry has lost 65,000 jobs and discussions between ‘pundits’ at the recent ‘Off-shore Europe’ exhibition are suggesting that the oil price recovery may not be realised until 2020. Grim news indeed.

It would be stating the obvious to say that no amount of lobbying by either the BFPA or more pertinent ‘oil-industry trade associations’ like UK PIA can change the price of oil. However, it is worth re-visiting what it is that associations can and do try to influence. As an organisation involved in lobbying, the BFPA has to use its limited resources to try and target the things that they can influence and, as the well-known prayer states, have the wisdom to recognise the things that they can’t.

Leverage

By working with other trade associations with similar interests the BFPA can gain leverage from its contribution and to this extent it is becoming very active.

In lobbying terms, equally resource-strapped civil servants and vote-hungry politicians tend to listen to organisations that:

(a) speak on behalf of a large number of individuals (and by default, voters).

(b) speak coherently with one voice and a clear message; (so that they don’t send out any mixed messages).

(c) are realistic about what they are seeking, (no lobby group will fundamentally change ‘city-hall’).

(d) are prepared to state what they believe government should do about it (Governments have lots of problems – they need solutions and lobbyists are best equipped to offer them in their own sectors).