2009 A Bumpy Road But Bright Future Awaits HDD

11th Annual HDD Survey
By Robert Carpenter, Editor | June 2009 Vol. 64 No. 6

That the United States (and world) economies are mired in a deep recession is old news. For the horizontal directional drilling industry, this recession is much broader than in 2001 when the telecommunications market imploded.

Then, an out-of-control telecom construction industry had whipped the small HDD rig market into a frenzied state – far beyond realistic expectations. The mid-sized rig market had still not fully developed its niche and the large rig market was struggling as the pipeline construction industry was experiencing one of its “valley” stages. A deep depression followed for the young industry that saw a market contraction by as much as 40 percent.

Just eight years later, one would expect the current recession to be much worse for HDD. And certainly for some HDD contractors, conditions have deteriorated in 2009. “It’s tough – only the smart and strong will survive” observed a mid-Atlantic contractor. A Southwest contractor lamented that “we don’t have much hope for 2010 so we’ll probably stay the course for now . . . I’m hoping for a comeback in 2011 but it all depends on the overall economy.”

However, for the HDD industry as a whole, there seems to be reason for optimism. The market is showing a remarkable elasticity and an upbeat – though tempered by realism – attitude towards the current economic state of affairs.

A matter of perspective

Three perspectives best describe the attitude of respondents to Underground Construction’s exclusive 11th Annual U.S. Horizontal Directional Drilling Survey: optimism, diversification and acceptance.

An Ohio contractor said he believes the market “is building back up. We work hard at giving directional drilling a good name so more people and cities want this technology used on their jobs.” Another Midwest contractor said their company expects a “slight decline from 2008 revenues yet steady for 2009.”

Conducted in April and early May, the survey queried contractors and utilities who own and actively operate HDD rigs and equipment. Survey participants were asked about industry trends, concerns and market status. Certainly the economy was foremost on many of the respondent’s minds and several regions around the country are struggling mightily. Yet, most believe things will get better – in fact already have for some – and many areas are holding their own. “I see the market remaining flat through 2009 with an expected 10 percent increase in 2010 due to stimulus money,” said one Illinois contractor.