Economic Report 2017

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Although some comƉanies are still reducing headcount, Ɖarticularly as suƉƉly chain comƉanies continue to coƉe ǁith loǁ actiǀity leǀels and a lacŬ oĨ Ĩuture Ɖroũects, the sloǁdoǁn in emƉloyment contraction suggests that the lar ge st r e duct ions t o t h e w or kfor ce m ay now b e b e h ind us. T h e r e asons for t h e ch anging siz e of t h e w or kfor ce haǀe also eǀolǀed͘ uring 201ϱ and 201ϲ, the industry ǁas Ĩocused on loǁering headcount as a ǁay oĨ ƋuicŬly reducing costs͘ ,oǁeǀer, in 2017, changes aƉƉear to ďe more transĨormational aimed at creating a sustainaďle ǁorŬĨorce Ĩor the longͲterm͘ &or edžamƉle, there are more instances oĨ ǁorŬĨorce contraction due to synergies made through mergers and acƋuisitions ;D&AͿ or due to eĨĨiciencies unlocŬed ǁithin ďusinesses ;see section ϲͿ͘ LooŬing ahead, the leǀel oĨ actiǀity on the UK ^ and the aďility oĨ UKͲďased ďusinesses to ǁin contracts oǀerseas ǁill largely determine the numďer oĨ ũoďs suƉƉorted ďy the sector͘ irect ũoďs, most closely linŬed to oƉerating edžƉenditure, are liŬely to ďe more staďle in the nearͲterm͘ This is in Ɖart thanŬs to recent eĨĨiciency imƉroǀements helƉing edžisting Ĩacilities edžtend their economic limit and continue oƉerations Ĩor longer͘ Indirect ũoďs, more closely linŬed to caƉital inǀestment, haǀe a less certain outlooŬ as they are reliant on neǁ Ɖroũect sanctions͘ Induced ũoďs ar e a b y - p r oduct of sp e nding acr oss all ar e as of t h e b usine ss and t h e associat e d w e alt h b e ing r e dist r ib ut e d acr oss t h e dom e st ic e conom y . As the industry continues to Ĩace challenges in a tough economic climate, the imƉortance oĨ Ɖositiǀe and Ɖroactiǀe ǁorŬĨorce engagement to helƉ deliǀer a sustainaďle longͲterm Ĩuture ďecomes eǀer greater, on and oĨĨshore͘ A comƉelling and clearly articulated ǀision oĨ the Ĩuture has ďeen Ĩormed ;see section ϱͿ that can helƉ to illustrate t h e op p or t unit ie s t h at indust r y is w or king t ow ar ds.

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