Size of UK underwater market grows to £9.4bn, but current UK govt policy is having negative impact

Frequent delays to offshore energy and infrastructure projects are threatening the viability of the UK supply chain, according to a new study from the leading trade and industry development body for the nation's underwater sectors.

Almost all respondents (96%) to Global Underwater Hub’s (GUH) Business Survey 2025 said that work in the likes of oil and gas, offshore wind and defence is moving too slowly, while 81% think developments aren’t progressing at the pace the country needs.

Entitled ‘Minding the Gap’, the report warns that firms may look to relocate overseas, with 82% of the sector feeling that UK supply chain capacity isn’t aligned with demand.

As well as giving a snapshot of the views and opinions of companies working in the underwater industry, GUH’s annual report, which has been providing a barometer of industry activity for two decades, offers insight into the scale of the market, opportunities for growth and the level of confidence.

Neil Gordon, GUH CEO, said: 
“For much of the last year I have warned of the risk of ‘minding the gap’, where oil and gas projects slow and renewables projects are delayed, creating a vacuum of inactivity that threatens the UK’s world-leading underwater supply chain.

“Our latest business survey shows this is already playing out and, increasingly, there is a real possibility this gap will be filled by fast-moving international projects, drawing away our assets, facilities and skilled personnel. If this is to happen, then a return to the UK will be incredibly unlikely, even when our own projects eventually begin.”

Encouragingly, the study revealed that the size of the UK underwater market has increased, from £9.2 billion in 2024 to £9.4bn in 2025.
This is largely attributed to an increase in the construction of new projects in a number of markets, many of which are global and reflect increasing exports.

While this reflects the high regard in which the supply chain is held internationally - with exports accounting for 43% of all revenue generated by UK underwater supply chain companies - it comes with an associated risk.

Mr Gordon said: “Our research shows that companies increasingly view greater prospects internationally than domestically, with shorter timelines, supportive government policy and greater volume.

“A sea-based supply chain is, by nature, highly mobile and, unless things improve in the UK, then it seems inevitable that companies will consider not just exporting to other regions but relocating there.”

Ahead of the Autumn Budget, the report calls for urgent action to safeguard the UK’s underwater supply chain, recommending four key steps: accelerate domestic project delivery, enhance policy certainty and support, strengthen the skills pipeline, and promote strategic diversification.

Together, these measures would reduce the energy transition gap, improve supply chain utilisation and build a more resilient, future-ready industry.

Mr Gordon added: “The UK has a supply chain with the capability and capacity to lead, but confidence in project timelines and policy support is eroding. Major industrial projects take years to mobilise, and we risk repeating past declines that cannot be reversed overnight.

“This is a pivotal moment. We need a coordinated industrial strategy, targeted investment and a sustainable skills pipeline to keep the UK at the forefront of underwater innovation. Stakeholders must act now to align policy, project flow and investment with the supply chain’s readiness and ambition. The opportunity is clear, but so is the risk.”

KeyFacts Energy Industry Directory: Global Underwater Hub