UK’s growing underwater industry hits £9.2B, gov’t urged to react to reach potential

The UK’s underwater industry has grown from £8 billion to £9.2 billion in the last 12 months, now supporting over 51,000 jobs. Thereby, the Global Underwater Hub (GUH) has called on the UK Government to recognize the scale and potential of the industry and to deliver an industrial strategy to boost investor confidence.

GUH’s new research revealed that the industry has both the capacity and capability to accelerate the global energy transition but only if project certainty is secured. According to the 2024 Business Survey, capacity has increased from 55% to 67% and 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, most notably in offshore energy.

However, confidence in whether or when projects will be delivered has declined, as 62% believe that project timelines will be missed. GUH said that lack of project surety and a concerning uncertainty about timelines make it tough for companies to tie business and investment plans back to final investment decisions (FIDs), 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, which, consequently, is prompting UK companies to consider relocating overseas.

Therefore, GUH has called on the UK Government to recognize 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. 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,” said Neil Gordon, GUH Chief Executive.

“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.”

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

Nearly 90% of companies believe they have the necessary capabilities to meet demand, while 92% consider offshore wind a primary or secondary market and 60% say that the oil & gas market remains their short-term priority. Furthermore, 70% of respondents will need more people to deliver current and future projects, and a 25% increase in technical roles is predicted to meet future market demand.

Over half of the respondents said they would need significant levels of investment in the next four to ten years, with 35% requiring major investment now.

“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.

“Our supply chain has the capability and capacity to take on global projects, but we must ensure that the UK remains an attractive location from which to manage these and that UK projects are internationally competitive when compared with opportunities elsewhere.”

According to Gordon, with an industrial strategy that encompasses multiple underwater markets and recognizes that most supply chain companies will service a mix of these markets, the capacity and capability of the underwater industry can be sustained and grown.