Oil & Gas UK, a representative organisation for the UK offshore oil and gas industry, has launched its first business confidence index.

The third quarter index shows that while there are signs of recovery in certain parts of the UK offshore oil & gas industry, business confidence in the supply chain remains fragile, with some way to go before it is fully restored to levels last seen some 18 months ago.

Confidence among exploration and production (E&P) companies appears to be more positive than businesses in the supply chain. Confidence in the E&P sector gained 10 basis points across the year to reach 63 in Q3 2009, while across the supply chain it rose from 41 to 47.

On employment, the supply chain companies are still feeling the impact of reduced activity and postponement of investment; however, the whole industry is intent on retaining its skilled workforce and is only resorting to job cuts where no other solution prevails.

Malcolm Webb, Oil & Gas UK’s chief executive, says: “Oil & Gas UK remains keen to work alongside government to help restore business confidence within our industry for the future.

“This vital industry is one of the UK and Scotland’s most important employers, tax payers and wealth creators. It can help lead our country out of recession and it is vital that it receives the backing and encouragement from government through the tax and regulatory regime to enable it to do so.”