The growth of renewables has been blamed for the drop in fossil fuel opportunities, but the boom-bust cycle of oil and gas also has plenty to answer for.
Considered the UK’s energy production capital since the 1970s, Aberdeen has long been susceptible to fluctuations in the fortunes of North Sea energy firms. Now EY ITEM Club’s new Scottish Autumn Forecast has revealed the Granite City lost around 10% of its industry workforce in the past 15 years, amounting to some 18,000 fewer energy-related positions today than in 2010.
Within this, significant redundancies have resulted from Britain’s transition away from fossil fuels, with energy jobs now more widely distributed across the country. But slumps in the value of oil and gas, alongside other variable trends inside the market, have also added to uncertainty and instability in the local economy, albeit usually for relatively brief periods of time. In 2010, for example, Brent oil was priced at $95 per barrel, while at the height of COVID-19 pandemic lockdowns it slumped to just $25 per barrel. At the time of writing, it was a little over $76 per barrel.
‘I’ve studied house prices and the last thing I did was in 2019 and I explored all the way back to the previous oil recession in the late 80s in Aberdeen,’ Chris Comfort, partner in Aberdeen-based estate agent Aberdein Consadine, told Energy News. ‘This has been a prolonged downturn whereas previously we’ve seen what I would call peaks and troughs and what seen is a substantial drop off in Aberdeen house prices.’
Aberdeen’s economy is expected to experience sustained decline in the coming years, with some estimates suggesting around 35,000 jobs could be at risk between now and 2030 due to changing energy demands and investment. This will not only impact property value in the region, but all firms operating in the area could feel the ripple effect of the contraction of an industry the city has grown to rely on for half a century.
‘Aberdeen is one of the few local authority districts in Scotland to have fewer jobs in 2023 than in 2010,’ the EY report stated. ‘During this time, it has lost nearly 18,000 jobs, equivalent to 10% of its workforce in 2010, largely due to the ongoing decline in the locally important oil and gas industry… Aberdeen City and neighbouring Aberdeenshire are forecast to continue to struggle.’
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