13th Annual Directional Drilling Survey: Mixed Market Recovery For HDD

By Robert Carpenter, Editor | June 2011 Vol. 66 No. 6

While the overall market recovery for horizontal directional drilling appears to be improving at the mid-year point of 2011, many contractors are still struggling with sluggish economic conditions.

Overall market recovery was still the top concern for contractors according to results from the 13th Annual Underground Construction HDD Survey of the U.S. market. The exclusive industry research was conducted during March and April.

The project backlog for most contractors is a direct reflection of where in the country they concentrate their work efforts combined with particular market niches. For many areas, 2011 is proving to be a year of feast or famine. For example, a southeast contractor plans to buy up to 20 mini HDD rigs before the end of 2011 as his company’s work on specific telecommunications and electric projects kicks off. “Our crews are booked solid through the first quarter of 2012,” he said, “and we’re bidding on additional projects for the remainder of the year as well.”

Yet, others see the markets as continuing to be depressed. A California contractor commented that “if prices continue to fall, I will start mowing lawns.” One Nebraska contractor fears the HDD market will “further erode until the glut of used machines is pushed out of United States. But 2011 will be okay providing mergers do not impact ILEC, CLEC and capital expenditures.”

This Michigan contractor hopes for the best, he stressed that the cheap prices are putting pressure on others to survive. “The market in terms of the average price per foot can't go anywhere but up. There are guys boring so cheap the rest of us can hardly stay in business.”

However, while there were some disparaging remarks and legitimate concerns reflected by respondents, most expressed overall confidence about the future of the HDD market. “We’re optimistic and think HDD will utilized more, both now and in the future,” said this West Coast contractor.

A Kentucky contractor defined their market in 2011 as simply: “gas, improved; electric and sewer, steady.” A Midwest contractor says they have seen steady growth in their HDD work: “I see it expanding more every year,” he added.

A Pacific Northwest construction firm sees a bright future: “We are very excited about the industry. This is why we are invested in this company and plan to build it into the largest company possible.”