Industry Forecast Continued from page 61 • Ethanol. This has proved to be a boon to the agricultural sec-


tor, as well as to PVF manufacturers who have helped to develop excess facilities in manifesting the conversion process from corn to the gasoline blend. An overblown agricultural subsidy, togeth- er with an extra 45 cents a gallon of ethanol federal spiff has made this controversial blend a major factor in adding to other- wise near bankrupt ethanol converters. Massive shipments over- seas have kept demand for this questionable gasoline supplement at an increasingly high level, thanks to U.S. taxpayer support. Despite the major investment by oil billionaire T. Boone


Pickens, natural gas usage for trucks and buses is limited to gov- ernment and institutional vehicles. Without a centralized infra- structure available for replenishment and support, this would not seem practical for America’s huge driving distances. Electric cars, such as the Chevrolet Volt are in the embryonic stage, but limited due to America’s vast distances and the frequency of nec- essary recharging. • Renewable energy. Of the three major renewable energy innovations — solar, wind and geothermal — only solar seems to have caught on big time. The most successful breakthrough is now occurring in Arizona, Southern California and other poten- tial areas of development, with an excess of annual sunshine. • Industrial and Commercial Construction. The traditional


mainstay of mechanical contracting will add little to overall PVF sector growth in 2011-12. With occupancy still well below par in most of the country, only healthcare, religious and educational institutions will provide substantial demand for PVF-oriented new projects. However, repair and maintenance will prove to be


well above average, especially in the manufacturing sector. Most companies are upgrading, mechanizing and automating on the shop floor, in order to obviate the need for additional employ- ment in an uncertain regulatory and healthcare environment. This should provide sizable stimulus for PVF manufacturers. The expertise of mechanical contractors has been widely recog- nized by the upstream and downstream elements of the fossil fuels industry. The current commercial lull has created new hori- zons for these professionals. • Exports. The export sector, which has been a major success


story in America’s otherwise drooping post-recession recovery, requires a multitude of manufactured supplies, among which are a vast variety of pipe, valves and fittings. This is being stimulated by the need of Southeast Asia, Brazil, Russia and Eastern Europe, which depend on the American brand name for quality and ser- vice. This has become especially effective in the greater demands for domestic product, in light of the frequency of failures among imported products, which have had their share of negative public- ity, due to oil spills, fires and other product-related calamities. A beneficial factor for domestic PVF manufacturers is the


emergence of increased demand for the industry’s leading brand names; and the ready access of pipe, valves and fittings offered by such manufacturers. Transparency of points of origin and bills of material are also increasingly being requested. With inventories in the distribution system currently limited


to ‘just in time’ quantities, availability has also become an increasingly decisive factor for order placement. This trend is expected to accelerate in 2011 and future years. n


Morris R. Beschloss, a 54-year veteran of the PVF industry. More Forecast on page 65


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Circle 28 on Reader Reply Form on page 85 Page 62/Plumbing Engineer January 2011


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