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You could be mistaken for believing that Aberdeen is in the middle of a boom, rather than an oil and gas slump, as you drive around the city and surrounding area.

New offices are being built in the city centre as well as on the outskirts, the £550m Aberdeen by-pass (the AWPR) is on schedule for completion this winter, work is underway on the new £333m Aberdeen Exhibition and Conference Centre (AECC), there are new hotels, Aberdeen Art Gallery is undergoing a £30m refurbishment and the Music Hall a £7m upgrade and £20m is to be spent on Union Terrace Gardens.

According to the Aberdeen & Grampian Chamber of Commerce infrastructure tracker, public and private projects worth more than £5bn have been granted planning permission or have had funds committed, not counting housing, and will be delivered over the next few years.

“Cautious optimism” are the words most frequently used to describe the view of the economic situation in a city which has been so prosperous and so dependent on oil and gas for several decades and that’s a view shared by Russell Borthwick, the Chamber chief executive.

“Businesses in all sectors are starting to feel a little bit more confident about the future and the latest Aberdeen Chamber oil and gas survey reflects that and shows people believe we have seen the worst of the downturn.

“However, that shouldn’t leave room for the complacency which has been rife here in the past. The focus needs to be kept firmly on the long-term economic strategy for the region and the necessary diversification away from oil and gas so that we are not overdependent on a single sector.”

“We have been over-dominated by politics and it’s really important that we move the focus from national and local politics back to business because that is what is going to fuel the economy and the recovery and we do have a little bit of momentum building here now.

“We have a vision for the future for the region, we have a Regional Economic Strategy, we have a City Centre Master Plan which is making good progress, and the Aberdeen City Region Deal is beginning to help deliver the economic diversification we require but we really need to increase the pace of that and I think what will help is some real clarity over priorities.

“There are lots of actions in those different documents and plans but we need to identify the priorities and who is going to lead on delivering them.

“We need a real sense of direction and purpose to help us get the pace we need.”

He said recent research had shown that three out of four business people don’t feel engaged in the future direction and success of the region.

“That’s a problem because if there is a sense that we can move from where we are to where we want to be by just leaving it to the two local authorities and Opportunity North East (ONE) to get on with it that would be a major mistake. Everybody needs to play a part in creating the type of future economy we want to live in, we want our kids to live in and want to leave as a legacy for their kids and the generation beyond.

“It’s really important that we create a narrative the folk of the north-east and the business community of the region is confident in and is prepared to share with all of our different audiences to make sure people are given a correct impression of our region today, the potential it has and why those investors or entrepreneurs or skilled workers should want to be a part of that future.”

Gordon Hobkirk, a partner in Maclay Murray & Spens LLP’s corporate department, agrees.

“I don’t think things are buoyant. I think things are stabilising and that comes from the oil price. People are beginning to feel they have some sort of platform to work from.

“When you’re talking about the economy of the region, oil and gas is the starting point because it impacts on everything else and that is going to remain the position.

“What is encouraging is that we have infrastructure projects underway and that is promising for the future.”

He said that ONE, the private sector economic development company established with £25m from Sir Ian Wood, which will be matched by Scottish Enterprise and others, was beginning to get some real traction.

“We are at the stage where we need a coordinated attempt across public and private sector to really grasp the nettle of preparing the economy and thinking about what it will look like beyond just oil and gas.

“Things are rumbling along in terms of the local economy and I don’t really see any huge uplift on the horizon and possibly not even in the first half of next year.

“There is just too much uncertainty around but there are people coming out of oil and gas and setting up new businesses.

“Food and drink and the premium beer and premium gin markets seem to be doing well and you can definitely get a sense of people are beginning to focus a bit more on that sector.

“Entrepreneurs are looking seriously at the opportunities for developing and expanding the food and drink sector but, of course, that’s an industry in which Brexit could potentially have quite a big impact.

“There are some really good businesses in the north-east and a very strong entrepreneurial spirit which is really coming out and it goes beyond oil and gas.

“Strong leadership is required to pull all the various strands together because then you have the makings of a good story.

“If you keep reinforcing the message that the fundamentals are strong that will help create success.”

Professor Gary McEwan, chief executive of Elevator, says: “It’s great to see so many new businesses flourish thanks to the support, advice and training we are able to offer through Business Gateway.

“Despite the turbulence in the economy, particularly in the north-east, the fact that so many entrepreneurs are coming through our doors with an idea and we are helping bring them to life demonstrates that we are on track to develop a world-class centre of entrepreneurship.”

The property sector can be a good barometer of an area’s economy and Richard Noble, managing director, and his team at FG Burnett are among those expressing “cautious optimism.”

Head offices may be curbing any commitments to industrial property beyond those which existing contracts can fulfil and that is leading to many lease re-gears and lease renewals but there are new entrants looking at Aberdeen, he says.

“They are looking at flexible arrangements no longer than five years and invariably make two or three-year deals or perhaps 10-year deals with a five-year break option,” he says.

“The whole flavour has changed from a landlord dominated market to a tenant dominated market with incentives often being demanded.

“The figures speak for themselves in that over the last three years the supply of office space in the Aberdeen area has gone from about 350,000 to 400,000 sq ft to in excess of 2.5 million sq ft.

“Last year there was next to zero demand in terms of any major size of office space so amongst an increasing supply it made pretty poor reading. The good news is that there has definitely been a far better sentiment since the turn of the year but we have yet to see it come through in terms of transactional activity.

“It is likely to take some considerable time before it makes any impact in the supply but one effect could be some older buildings, coming to the end of their economic life as offices, could change use to student accommodation or flats.”

Aberdeen’s covered shopping centres continue to do well with low voids. That has been at the expense of Union Street, Aberdeen’s granite mile, once described as “one of the finest streets in the Empire”.

Rents have fallen along its length but that has allowed occupiers to take space on Union Street who otherwise would not have been able to afford it.

“What that illustrates is that landlords are being realistic but it means relatively unattractive occupier profiles.”

However, the arrival of a combined 210,000 sq ft grade A office space at The Capital and The Silver Fin at the west end of Union Street is already making a positive difference and leading to interest in retail lets nearby.

“Hopefully the £20m being invested in Union Terrace Gardens will make a difference to the central area of Union Street.”

ONE has been widely praised for the work it has done since it was formed at the end of 2015 and Jennifer Craw, chief executive, says: “ONE’s goals are to lead on the development and delivery of the region’s renaissance economic vision and strategy; grow the food, drink and agriculture sector; build the life sciences sector; maximise the oil and gas opportunity; and evolve tourism to exploit new business and leisure opportunities.

“These were developed in conjunction with industry and stakeholders, reflect the real opportunities within the region and its key industries, and are aligned with sector-specific, regional, Scottish and UK economic development priorities and strategies. Success for the region – which has been an economic engine for decades – is important for Scotland and the UK.”

ONE will invest up to £3.5m in 2017/18 in projects and programmes across its priority industry sectors, which will secure more than £3.2m of match funding from partners.

ONE’s activity this year will include a food and drink business growth programme, work with agriculture supply chains on efficiency, developing diversification opportunities with the oil and gas supply chain, and direct funding support to VisitAberdeenshire to grow leisure visitor numbers and tourism revenues in the region.

The Oil & Gas Technology Centre innovation project has been successfully launched and ONE is now leading on the development of the other two innovation projects within the £250m Aberdeen City Region Deal – the Agri-Food & Nutrition Hub for Innovation and the Bio-Therapeutics Hub for Innovation.

“ONE is investing resources for maximum impact and using expertise and insight to support the ambitions of the enterprising businesses of all sizes across our key industries,” she says.

“The region is also clear that the oil and gas industry that has sustained it will continue to play a key role in its future, through maximising recovery of North Sea oil and gas, transitioning the city to a global hub for innovation and anchoring a globally competitive supply chain for the long-term.

“Effective partnerships between industry and the public sector are also central to the region’s future, with the Regional Economic Strategy and the subsequent Aberdeen City Region Deal, both setting clear targets for collaboration and investment for Aberdeen City and Aberdeenshire Councils and the business community.”

She said the City Region Deal has provided a mechanism to secure Government funds for projects identified as having transformational impacts.

“The signing of the deal last November was a real vote of confidence in what we can deliver. The renaissance vision for the region is gaining traction and we are committed to working with our partners to catalyse change that delivers medium to long-term business growth and employment,” says Craw.

Councillor Douglas Lumsden, Aberdeen City Council’s convener of finance, policy and resources, says: “Aberdeen and the wider city region is integral to the UK economy, with a GVA contribution second only to inner London and it is essential that we not only seek to maintain that leading role but enhance it.

“It is recognised that the energy industry will continue to be central to our economy and anchoring the existing supply chain, and the associated expertise, to Aberdeen is crucial.

“Diversification is another strand of what is a comprehensive strategy which continues to evolve and develop, with a particular focus on areas including the bio-therapeutic and agri-food sectors.

“Internationalisation is another major theme for the Aberdeen city region and together with our partners we will be investing significantly in transport infrastructure as well as digital infrastructure to support our ambitions to promote Aberdeen’s role as a global hub for industry, innovation and tourism.”

Michael Fotheringham, partner, James Milne Chartered Accountants says: For years our economy has been buoyed by North Sea oil and gas but with the downturn in the industry it has had a huge effect on far more businesses and people than just those directly involved. In fact, the whole of the north-east and beyond has some sort of link with the oil and gas sector.

“The business community needs stability to boost confidence and drive investment. But it’s not just the downturn in oil and gas that’s holding us back. Political uncertainty with Westminster and Holyrood elections, Indyref and Brexit all add to the climate of uncertainty.

“Despite that background, discussions with our clients suggest businesses are generally more optimistic of an improving economy and there’s definitely signs that Aberdeen and the north-east has a brighter future.

“There may still be some way to go, but certainly there is more positive news in the media and the experience of the last few years will, I’m sure, create a more resilient and stable economy.”

Graeme Gordon, chairman of ScotlandIS, the trade association championing Scotland’s digital technologies industry and chief executive of IFB, a solutions provider for core business ICT infrastructure services, said: “ScotlandIS has always had a very strong membership in Aberdeen and the north-east.

This reflects not only the wide variety of firms using digital technology in the oil and gas industry but also the number of companies using skills and innovation which have emerged from the sector: data analytics, sensor management and predictive and proactive forecasting for example.

Add to this our robust agricultural, tourism and food and drink companies, all of which are using more and more digital tech as a basis for doing business, and you see that the area is already well placed to take advantage of digital opportunities.

“The area has a long and successful background in oil and gas and has been very good at internationalising business too. As people transfer their skills out of this sector and into the general workplace and the digital technology graduates of our world class universities and colleges enter the workforce, this is the moment to seize the opportunities that tech offers.

From start-ups and SMEs to established companies and high net worth individuals sharing experiences and funding, we are well placed to create a digital technology cluster on a par with those seen in Edinburgh and London.”

Barry Fraser, director, Grant Thornton says that the slump has been brutal for the oil and gas industry with significant cost-cutting and headcount reductions but businesses had generally made themselves more robust and better placed to get through the remainder of the downturn. Many in the north-east had expanded internationally.

“There have been start-ups across multiple industries and the £5bn in infrastructure projects planned or underway will create a more competitive platform to enable us to compete with other regions and countries when we are trying to encourage inward investment.

“We have been sorely lacking in investment in infrastructure giving us connectivity and better tech support.

“The Chamber and other organisations have to be thanked for having helped make the area a more attractive place to live and work in terms of some of the festivals that have been brought to the area. It makes it a more enjoyable place, particularly for younger people, to come and live and work.”

David McLeod, a director of FG Burnett, says that the north-east should take significant encouragement from the fact that major deals which have been done in the city have been from international investors.

“Investors who understand Aberdeen understand it is still a major international hub in the energy sector with a huge amount of expertise here. People travel all over the world from Aberdeen conducting global operations so this is not a city which is going to close down in the next five years.

“In oil and gas BP are drilling, Statoil are drilling, Total are drilling, Nexen are drilling. That is a UK company, a Norwegian company, a French company and Nexen is owned by the Chinese government and these guys know there is a lot to play for in the North Sea.

“It might take time for people to recognise that the recovery is starting to happen and most investors will probably want to see a bit more evidence of that before they start looking again at Aberdeen. Overall, given where we have been, I think we should be very pleased with the level of activity there has been.”

He says most of the infrastructure projects will be complete by 2020 and that coincides with the timescale being talked about for the oil and gas recovery gathering pace.

“I think people are getting reasonably excited about 2019-2020,” he says.