In the previous quarter, energy services companies continued to report drastic falls in value and volume of business. In this quarter, the trend continued and 69% of responding companies indicated the value and volume of business was below normal. This is a slight improvement from 75% in last quarter.
When probed, companies indicated that the reason for the value of business being below normal, was due to decrease in demand for services and less business opportunities. A similar picture emerges for the reasons for declines in volume of business – 88% report decreases in demand for services.
Companies that did report value and volume of business increases, attributed it to additional contract or projects, increased activities in the upstream and opportunities in international markets.
48% of respondents indicated that they were less optimistic than they were in the previous quarter while 45% indicated that there was no change over the quarter. 86% of these companies indicated that it was largely due to the worsening of the overall economic environment.
Despite the relatively high number of respondents indicating that they were less optimistic about their business prospects, there was an improvement, since in the previous quarter, more than 75% of respondents indicated that they were less optimistic.
In terms of employment, 46% of companies reported that the total number of employees fell over the quarter. Thirty-nine percent report declines in fulltime employment and 36% reported declines in temporary employment.
We asked companies about their capex authorizations over the next 12 months. The respondents’ responses were spread fairly evenly in terms of what capex would be used for. Half of the respondents indicated that they would be investing to increase efficiency, speed and exploit new technologies. While others indicated that it would be used to provide new services, to reach new customers, for replacement and to expand capacity.
The Energy Chamber's Energy Services Sectors Survey (ESSS) is a quarterly survey of energy services contractors which allows for such an assessment. Overall, a vibrant energy services sub-sector is integral to the overall health of the energy sector.
The ESSS attempts to map the performance and optimism of our energy services sector members, providing data on their business confidence and on some of the phenomena which impact their operations and business prospects. The survey draws on information from survey participants, such as the level of confidence of service contractors and the value and volume of business in the current quarter, as well as what they project for the next quarter.