14th Annual Horizontal Directional Drilling Survey: Telecom, Energy Drive Market, But Is It Sustainable?

Riding The Wave
By Robert Carpenter, Editor | June 2012, Vol. 67 No. 6

A Midwest respondent said that “the near-term will continue to be stagnant with the continued influx of competition and sluggish increase in pricing. The long-term continues to be difficult to judge with the constantly changing economic environment.”

This contractor echoed a perceived problem of several survey respondents: “I’m concerned that the market will get flooded with subcontractors buying equipment and trying to get rich just like during the fiber boom. If that gets out of hand, we’ll be buying barely used rigs for pennies on the dollar again.”


Along that same train of thought, this contractor voiced a strong concern about quality in the market place. “The biggest problem with the HDD market is the mass production of drills. There are too many contractors that think buying a rig makes them a driller. All the drillers at my company are competent and quality-oriented. But I have worked with and around many contractors over the years, mainly in telecom projects, that use old, used, breaking-down equipment that damages property and utilities. They are struggling to survive because of lack of caring, lack of quality and underbidding wars to stay alive.”

With the strength of several key market niches in different areas of the country and the number of contractors jumping into the HDD arena increasing, almost 82 percent of the survey respondents indicate their competition has significantly increased in recent years.


All about rigs
While rig manufacturers are operating their factories at accelerated rates, there still seems to be understandable caution as to just how much money and resources will be devoted to expanded production lines. The fiber bust of the early 2000s is still etched on most manager and executives’ minds. HDD manufacturing and services growth is accelerating but at a subdued pace – sometimes causing consternation by contractors who want a new rig or equipment immediately and finding out they are on a months-long waiting list.

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