There has been no slowing in the job losses in the oil and gas industry this year, and there are further cuts to come, but the crisis could be reaching a turning point, according to an industry report released this week.
The stark findings of the 25th Oil and Gas survey, conducted by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and sponsored by national law firm Bond Dickinson, reveal that more contractors have reduced both their permanent and contract staff than at any other point in the history of the survey and fewer are working at or above optimum levels than ever before.
However, while more than two-thirds of employers shed staff over the past year - by 15% for operators and 7% for contractors - there are some positive signs that the rate of employee cuts could slow in the year ahead.
Six months ago, operators were predicting a 17% reduction in numbers which has now fallen to 5%, with a similar reduction from 2% to 1% by contractors.
Confidence levels have also improved for both the UK Continental Shelf (UKCS) and internationally over the past 12 months, albeit from the lowest point since the first survey in 2004.
Twelve percent of contractors are more confident about their activities in the UKCS in the current year, compared to 7% in May, while 47% - down from 75% - are less confident.
Optimism concerning current international activities has also improved in the past six months.
Two out of three respondents believe the sector has already reached the bottom of the current cycle, or will do so within the next year, and a further 25% feel it will be within the next one to two years.
As the industry has worked to drive down costs and adapt to the new low oil price landscape, the survey reveals that 43% of respondents have reduced pay in the past year, including 15% who cut it by average of 10%.
In addition, 40% of all firms - compared to 25% in the previous survey - reported making significant changes to terms and conditions. This is not only salary and bonus payment reductions, but also in changes to shift pattern and working hours, pension contributions, medical plans and benefits packages.
James Bream, research & policy director at Aberdeen & Grampian Chamber of Commerce, said: “We're likely to remain in an uncertain position through 2017 and ‘the bottom’ will arrive at different times and feel different for each company.
“It is clear that companies are striving to become fitter, leaner and they are working hard to look for new markets to secure their future and employment levels where that is within their control.
“There is no question of complacency in the North-east and our brilliant people will continue to demonstrate that the oil and gas sector should be considered a success story in generating economic value for the UK economy."