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

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

Active companies and organizations within the HDD industry continues to include a large number of utilities as that segment comprises 13 percent of the market with contractors accounting for the remaining 77 percent. About 17.6 percent of those involved in directional drilling cite HDD as their primary business focus.

Market driver
One of the positive market drivers in 2011 has been the telecommunications market where the long-delayed “shovel-ready” stimulus projects are finally going full steam (though it took three tries before the money was finally disbursed). Essentially, that construction cycle has been compressed to 18 months, causing the frantic construction rush in some parts of the country. The question remains as to what kind of strength the telecom market will have naturally regained when the stimulus funds are exhausted in 2012.

The telecom market routinely uses smaller HDD rigs. So, with parts of the telecom market posting a strong year, it’s no wonder that the projected rig sales for 2011 has jumped to approximately 1,770, up from 1,411 in 2010. In the first quarter of 2011 alone, almost 450 rigs have been sold.

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That HDD has been a game-changer for the underground utility construction industry is a given. Since its introduction in the late 80s, the acceptance and indeed, reliance, of the marketplace upon directional drilling has been enormous. Truly the definition of a disruptive technology, HDD now permeates every aspect of the construction market, big applications and small. The average underground utility construction company now owns about eight rigs (of all sizes), up from an average of six rigs just five years ago. Contractors and utilities anticipate that more than 49 percent of their work in 2011 will involve HDD and that will increase to 54.6 percent by 2016.