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January 2013 Issue

Firing Line Report: Ocean Industry Expects Modest Growth, Despite Shaky World Economy

By Meghan Ventura
Managing Editor, Sea Technology magazine

For its 30th annual Firing Line Report, Sea Technology magazine asked readers about sales over the past year, areas of growth and concern, and their expectations for the near future.

The ocean industry heads into 2013 buoyed by cautious optimism as nearly 50 percent of the worldwide market reported an increase in sales in 2012, compared to 2011. One-third of respondents saw a decrease in sales, and the remainder said they saw no change in business.

Optimism for the Future
The mood of domestic and international oceanographic markets is generally upbeat. More than half of those responding to the Firing Line survey, or 59 percent, expect sales to increase in 2013, while 29 percent estimate business will remain even. Twelve percent anticipate sales to dip. A majority of the responses to the Firing Line survey came from the U.S., Europe and Asia.

U.S. Compared to 2011, business was up for more than half of U.S. respondents last year. Sales are expected to increase or remain level in 2013.

This optimism was tempered with concerns about budget reductions at government and research institutions, as well as partisan politics that have brought decisions on future U.S. economic policies to a halt.

Europe. In general, the European market is optimistic about 2013. Slightly more respondents in Europe reported increased sales from 2011 to 2012 compared to those who said their business slipped. The mood of both the European and international markets, according to European respondents, was described as moderate and buoyant, as businesses wait for an economic upturn.

Asia. Even though most respondents from Asia replied that their business in 2012 was down or level compared to the previous year, they believe the domestic ocean market is very optimistic for 2013. The region expects to receive more business from South Korea and Israel.

Source of Orders
The civilian government and offshore industry continue to be the primary source of orders for the oceanographic market. Academic institutions still provide a moderate amount of business.

About 55 percent of respondents said cash-strapped military agencies had very little effect on their business, while 22.5 percent reported a significant effect and 17.5 percent rated it as a moderate effect. Civilian agencies have more of an impact on the ocean industry's bottom line, with 26.8 percent of respondents rating their effect as significant, 43.9 percent moderate and 29.3 percent as little.

The marine renewables industry has started to affect business in the U.S. and China, bringing an increased focus on AUVs and other autonomous sensor assets. Many European businesses reported seeing more demand for metocean services, subsea modules, environmental monitoring systems, cables and connectors, inclinometers and ship design from this sector.

U.S. respondents said the subsea offshore oil and gas sector had the greatest potential for growth due to more exploration and drilling in new, deeper areas, strong commodity prices and an expanded use of underwater vehicles. The looming 'fiscal cliff' and unknown impacts of sequestration have made the U.S. ocean market wary of relying on the military and other agencies.

Many sectors in the U.K. are forecast for growth, including instrumentation and equipment for offshore, marine renewables and civilian government work. The latter is spending on climatic and meteorological research despite Europe's economic crisis.

In Asia, acoustic sensor systems and coastal water quality monitoring technologies are expected to see an increase in activity. The marine renewable energy market is slowly growing there, but businesses in the region remain largely unaffected by it.

Most Active Product Categories
Survey respondents highlighted acoustic sensors, multibeam sonar systems, electrical equipment, software and data-processing products, and batteries and chargers as the most active product categories in 2012.

The underwater vehicles category was rated as somewhat active by most survey takers and had a even split among the other choices of inactive, active and very active. Echosounders had a fairly good year, with a majority of respondents saying this category was active or somewhat active and one-quarter of respondents reporting inactivity.

Looking to 2013
After weathering another year with a tough fiscal climate, the oceanographic industry watches and waits for global markets and governments to recover financially. The U.S. is on track to continue 2012's plodding recovery into the new year, while the worldwide economy is expected to remain shaky for at least the next few years. Despite financial turmoil, government and research agencies, as well as the offshore industry, are still seeking cost-efficient ways to monitor the maritime environment and ocean-based equipment.

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Sea Technology is read worldwide in more than 110 countries by management, engineers, scientists and technical personnel working in industry, government and educational research institutions. Readers are involved with oceanographic research, fisheries management, offshore oil and gas exploration and production, undersea defense including antisubmarine warfare, ocean mining and commercial diving.