Good Vibrations: HDD Industry Riding Out Recession Better Than Other Market Niches

12th Annual HDD Survey
By Robert Carpenter, Editor | June 2010 Vol. 65 No. 6

Yet, water and sewer continue to be viewed as growing markets for HDD. As discussion continues both at the federal and local level on ways and means to increase infrastructure spending over the long term, HDD seems poised to play a more significant role in those markets. Long-time, traditional sewer/water contractors, with large fleets of backhoes, excavators, auger boring and tunneling equipment are part of the new wave committing to HDD. They realize that HDD can be a practical, necessary and profitable addition to their tool chest.

HDD is already established in the water market as pressurized pipe makes the technology more immediately applicable to the sometimes erratic path of bores. PVC is the dominant plastic pipe used in the water market and PVC manufacturers have excelled at producing pipe products (restrained joints and fusible pipe) that make it an effective material for use with HDD water applications.

HDD also continues to gain favor for certain aspects of sewer construction such as force mains. However, the ability to achieve line and grade with HDD in a fast and cost-effective manner continues to elude manufactures, though substantial progress has been made and research and development is ongoing. In fact, several respondents cited the ability to bore precisely for water/sewer as one of the major challenges facing the HDD industry. The needs of sewer/water pipe installation often requires stronger rigs, further driving demand for mid-sized units.

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As expected with a major recession, sales slowed in 2009. However, by the first quarter of 2010, some manufacturers reported that sales of assorted rig sizes were bouncing back strongly. The veteran HDD contractors learned their lessons well after the telecom bust and as markets started weakening in 2008, most quickly scaled back their purchase plans to ride out the anticipated tough economic conditions. Subsequently, the age of the HDD fleet has increased. Rigs that are 10 years or older have grown from 9.8 percent in 2008 to 12.8 percent in 2010. Numbers for rigs less than two-years old fell from 18.5 percent in 2009 to 15.3 percent in 2010.

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