A good way to gauge the business climate of the energy services sector is to examine the level of confidence that energy service contractors have in the activity of the sector. The Energy Chamber’s Energy Services Sectors Survey (ESSS) is a quarterly survey of energy service contractor which allows for such an assessment. The ESSS attempts to map the performance and optimism of our energy service sector members, providing data on their business confidence and on some of the phenomena which impact on 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.
Optimism
Data collected from the ESSS for Q1 2016 shows that approximately 14% of the respondents claimed to be more optimistic than they were three months prior, while 25% indicated that there was no change in their level of optimism for the sector and the majority of respondents (61%) indicated that they were less optimistic than they were three months prior. These results are clearly reflective of the general feeling of uncertainty during this downturn in the energy sector due to falling commodity prices.
Value of business
When asked about the value of their business in Q1 2016 68% of respondents indicated that it was below normal while only 8% of respondents indicated that it was above normal. Based on the participants who indicated that their value of business was below normal, 70% indicated that it was due to the decrease in demand for their services.
Volume of business
Energy services companies also indicated a marked decline in their volume of business with 68% of respondents reporting that the volume of their business was below normal.
Looking forward
The next quarter is not holding much promise for an increase in the volume of business. 64% of the energy services companies polled reported that in the next quarter (Q2 2016) they expected the volume of their business to be below normal.
Overall a vibrant energy services subsector is integral to the overall health of the energy sector. It is a source of local content as well as an important competitive pillar for Trinidad and Tobago to sustain its long term growth through services export. The energy services sector is a viable source of employment. However, due to the uncertainty in demand in Trinidad and Tobago the energy services sector is facing its share of challenges and decline in opportunities available. As such, it is important for local energy services companies to seek international markets for their goods and services. The Energy Chamber continues to work with member companies in assisting them to explore opportunities in international markets and will soon be embarking on our third trade mission to Guyana where we believe there are sizeable opportunities for T&T service companies.