Oil and gas operators in the North Sea are expected to lay off more jobs in the UK.
The latest industry survey found confidence is low, with operators saying they have seen a 15% cut in their UK-based headcount in the past 12 months.
They expect a further reduction of 17% in the coming year.
Around 75% of oil and gas contractors surveyed also said they are less confident about their prospects compared to a year ago and only 7% said they are more confident.
While 42% of companies cite increasing efficiency and productivity as their main priority, one in four said cutting costs is crucial.
Contractors add level of demand, commodity price and economic climate are the most important factors constraining them followed by complex regulations, taxation issued and costs of capital.
Skills shortages are also seen as a “limiting issue” by 50% of contractors and the loss of staff to other companies by 43%.
They have all contributed to a decline in investment, the survey conducted by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute states.
However the North Sea industry are “unfazed” by Brexit, it adds, with nearly half (45%) of respondents saying it is difficult to reach a clear view on what vote would benefit oil and gas businesses.
Russell Borthwick, Chief Executive at Aberdeen & Grampian Chamber of Commerce said: “Respondents have reported falls in activity but a slightly higher number are working at capacity internationally. Looking a year ahead, there is perhaps a shard of light as confidence looks relatively higher for international markets.
“In the previous two surveys we carried out, we found confidence had hit record lows, with an all-time low in November 2015. This time, while the figure is still firmly in negative territory, it has marginally improved, which may perhaps show we are near the bottom of the curve.”