January 2014 Issue
Firing Line Report: 'Optimistic but Challenging' Outlook
By Aileen Torres-Bennett
Managing Editor, Sea Technology
For our 2013 annual industry survey, we received responses from around the world, with 50 percent of responders from the U.S., 22 percent from Europe, 11 percent from Asia, 7 percent from Canada, 4 percent from Australia, 4 percent from South America and 2 percent from Africa.
Among those who participated, 49 percent said their volume of sales increased in 2013, 38 percent said their sales volume remained on par with 2012 and 13 percent reported lower sales volume.
As for 2014 prospects, 62 percent of survey participants said they expect business to increase in the upcoming year, 24 percent expect to remain level with 2012 business and 13 percent expect a decrease.
Our survey asked about sales in specific product categories. The most active product categories were acoustic sensor systems, batteries/chargers, communications/telemetry, GPS/DGPS, mapping/survey systems, sensing/measuring/sampling systems, software/data processing, sonar and underwater vehicles.
We asked participants which industry/market area provided the most orders for their business in 2013, and they ranked academia/research institutions and government (military) the highest.
The industry/market areas that respondents believe have the greatest growth potential are underwater vehicles, environmental consulting, fishery information systems, offshore environmental impacts, oil and gas, government (military and civilian agencies), and academia.
Regarding oil and gas, one respondent said that exploration is moving to deeper waters and more harsh environments. Oil and gas was also cited as having the most predictable cash flow. The 'volume of underwater platforms in operation and technical challenges yet to be resolved' are other reasons mentioned by participants for oil and gas market potential.
Regarding the government, one company said it was eyeing the military as a potential growth sector because of a lag in investment of new equipment, which means 'there is a great potential for retrofit.' Government civilian agencies were also believed to have growth potential because 'a new project (deep ocean resources development) requires a lot of oceanographic instrumentation.' Civilian agencies 'are under-serviced currently,' a respondent said.
Another respondent who cited government agencies as having business growth potential said that 'government agencies are partially privatized and need to generate a portion of their own income. Therefore, [they] need to obtain or replace equipment, implement secure databases and be able to obtain and present data in short order and thus be able to charge a nominal fee for purchase by private companies.'
Government-funded coastal engineering in the Pacific has growth potential due to heightened awareness of sea level rise and significant weather events affecting foreshore infrastructure.
'It seems that once you get through the door, more contracts are easier to get,' said a respondent, regarding government contracts.
'Ocean Government' by civilian agencies has potential because responsibilities are being transferred to those institutions.
The downside to the government market is: 'Unfortunately, a lot of our orders are dependent upon government money, and as governments worldwide are not spending any money, it has hit our sales and will continue to do so,' reported a respondent.
Fifty-seven percent of participants said that federal military spending has a moderate to significant effect on their business. Seventy-seven percent reported being affected by civilian agencies' federal spending.
Some businesses report that the marine renewable energy market has been affecting their business in several areas, such as weather sensing, wave and tide measurement, current meter and microstructure devices, power source for future underwater vehicles, wind turbines, hydrokinetic energy, research and development and consultancy services.
Domestic, International Markets
The survey asked participants to describe the mood in their particular country's oceanographic market. The responses ranged widely, from negative to positive, with most responses being fairly positive. 'Optimistic but challenging,' according to a respondent, seems to sum it up best.
The overall mood for the international market was wide-ranging, though mostly positive, as well. 'The international oceanographic marked is growing due to more focus on exploiting the resources in the oceans,' said one respondent.