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Editor's Log: Issues And Opportunities
At this time of the year, inevitably most conversations turn to market outlooks for the coming year. People want to hear the best scenario, but most are willing to hear the truth. Prognosticating market truths is an educated guess as best. But I’ll give it a try with my usual disclaimer that I’m not responsible for the accuracy of any statements.
Predicting the underground construction and rehabilitation market is particularly hard this year for certain market segments. The Great Recession has been declared over for almost four years. Yet, our economic recovery is sluggish at best, with the public works markets suffering as the result. The Great Save-All, Shovel-Ready Stimulus package has been spent for some time with mixed results. The most obvious tangible effect has been adding another $800 billion to our national debt. Right now, it doesn’t seem to have been a wise investment but history will have to be the judge of that.
On the other hand, certain markets have prospered. Energy is on a roll, maintaining a high level of activity since 2007. Market dynamics world-wide finally collided at the same time to create a healthy, vibrant market place. Prices at last rose to more accurately reflect market costs and values. The public has adjusted to higher energy prices to the point that we don’t hear much outcry about, for example, the cost of gasoline, unless it tops $4 per gallon. The same is true for natural gas and electric bills. While the public may not like paying higher utility bills, as long as gas stays below $5 per BTU, sticker shock is minimal.
In fact, study after study shows that Americans are loving the concept of energy independence for the United States. Almost two-thirds of Americans even favor construction of the northern leg of the Keystone XL Pipeline, from Canada to Oklahoma. All that reflects a solid oil and gas pipeline market, with or without the construction of Keystone, for 2014 and the next several years.
Telecom was late getting its stimulus investment. It took three tries before the government agencies finally settled on an acceptable formula for awarding the money. The concern was what would happen to the telecom construction market once the stimulus dollars ran out. That question has been very favorably answered in 2012 and 2013, with the market showing remarkable strength. The quest for fiber by the American public continues to grow.