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Good Vibrations: HDD Industry Riding Out Recession Better Than Other Market Niches
12th Annual HDD Survey
The maturation of HDD in the construction market place can be easily traced to the diversity of materials that can now be effectively installed. Traditionally, HDPE has been the dominant pipe material installed. And while that still held true in 2009, other pipe materials displayed growing acceptance. HDPE was used on roughly 41.3 percent of projects with PVC being used 24.1 percent of the time. Ductile iron and steel pipe held strong at a combined 28.7 percent market share.
Service, by far, was the most cited quality contractors want from their equipment/service providers, at 70.3 percent. Technical knowledge was cited by 56.3 percent of respondents followed by quality at 53.1 percent, cost of service/equipment at 46.9 percent, availability at 45.3 percent and location at 32.8 percent.
The primary markets for HDD have changed little for 2010 although the various construction niches are all strong with no particularly area dominating. As in the past, the largest niche remains telecommunications at an 18.6 market share, down from 19.2 percent in 2009. The HDD electric niche remained constant at 17.3 percent followed by gas distribution at 16.1 percent (down from 16.5 percent), water at 15.8 percent (up slightly from 15.7), oil/gas transmission pipelines at 14.1 percent (down from 14.3 percent), and sewer up slight from 11.7 to 11.8 percent.
The “other” category represents a hodgepodge of niches carved out of the marketplace by creative contractors or emerging applications. Geothermal falls into the latter category and while still a small blip on the radar screen, several survey respondents expressed optimism about its potential. Manufacturers are also betting on geothermal as four rig manufacturers now have specific geothermal products.
In 2009, 54.2 percent of contractors performed HDD work valued in the $1 million to $5 million range. For 2010, 31.4 percent expect to see an increase in HDD projects, 55.3 percent anticipate roughly the same amount of work, and 13.3 percent expect a decrease.
More than 25 percent of the survey respondents expect to purchase a new rig in 2010 compared to 22 percent in 2009. The used rig market continues to thrive as well with 45.5 percent saying they have purchased used rigs in the past and 60.8 percent saying they would consider a used rig for their next purchase. Mid-sized rigs are also the most popular size class in the used equipment market with interest from 42.9 percent followed by small rigs at 39.3 percent.