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2009 A Bumpy Road But Bright Future Awaits HDD
11th Annual HDD Survey
To its benefit, the HDD market continued to mature as the economy regained its footing after the telecom meltdown. The industry has experienced an “extreme make-over” that is paying dividends in this slow construction market. The development of the mid-sized market has brought a competitive edge and diversity for many contractors formerly engaged in just small rig applications.
Another survival tactic for the small rig HDD market has been an innate ability to diversify its applicability and develop profitable niches. For example, several HDD contractors have found steady work in the geothermal industry. In an article chronicled in this issue of Underground Construction, a Nebraska contractor used HDD to install radiant heating pipes through frozen ground that reached into the middle of a cold storage facility. The list of unique – and profitable – applications for HDD seems limited only by imagination. While HDD has not reached the status of the backhoe within the utility construction industry – a common, versatile tool on virtually every construction site – it is well on that path.
“Our company does not rely on one market to keep our drills running. We are always looking for different application. Although the economy is slow we maintain our clientel by providing a competitive and quality job,” said this respondent from California. Another contractor in the Midwest sees emerging opportunities as “more engineering firms are designing jobs with the option to directional bore instead of open trench.”
A Southwest contractor pointed out the good news/bad news of underground utility construction during this recession: “There is more HDD, but fewer overall contracts.”
One of the less-than-desirable by-products of the previous telecom recession was that as desperate contractors struggled to stay in business, they engaged in fierce price cutting to the point of charging below their actual costs. As markets have slowed in 2009, that misguided survival ploy is beginning to emerge again in some areas around the country. A Mid-Atlantic respondent pointed out, “Though there is slight growth in our HDD projects, the pricing structure continues to be driven down.”