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Achieving Predictable Valve Performance for Safety Applications

Achieving Predictable Valve Performance for Safety Applications

A focus on having the proper specificati...

Putting Servo Valves Back to Work

Putting Servo Valves Back to Work

Industries as varied as paper production...

Corrosion and Fouling: Is There a Solution?

Corrosion and Fouling: Is There a Solution?

According to a 1998 study released by the ...

Valves with All the Trimmings

Valves with All the Trimmings

The term valve trim has been around for ...

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Industry Headlines

Strong Momentum for M&A Activity in the Chemical Industry

Monday, 19 February 2018  |  Chris Guy

Global chemical mergers and acquisitions (M&A) activity in 2018 is expected to remain strong, as higher valuations continue to be mitigated by imp...

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Valve Positioners Offer Improved Control Valve Performance

Valve Positioners Offer Improved Control Valve Performance

Monday, 19 February 2018  |  David Matherly

From time to time, we are re-posting well-received or particularly valuable articles that have previously run on VALVEMagazine.com so that those who m...

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Industry Headlines

ValvTechnologies ITC 2018 Recap

2 DAYS AGO

The biennial ValvTechnologies’ International Technical Conference and Users Group (ITC) was held on February 8-9 in Houston. Seeking to educate, inspire and engage attendees over a two-day period, the event brought together hundreds of attendees from across the globe to share valuable insight ...

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Matthew Davis Named Field Service Manager at Weir

4 DAYS AGO

Weir Valves & Controls USA (WVC USA) has appointed Matthew Davis to the position of field service manager. In his new role, Davis will be responsible for managing the WVC USA Field Service crew and organizing WVC Service jobs for power plants worldwide.

Davis joins WVC USA with over 20 years of ex...

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Strong Momentum for M&A Activity in the Chemical Industry

-1 DAYS AGO

Global chemical mergers and acquisitions (M&A) activity in 2018 is expected to remain strong, as higher valuations continue to be mitigated by improving global economic conditions, continued inexpensive financing, and an appetite amongst industry participants for growth and transformative M&...

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TransCanada Turns Attention to Natural Gas System

3 DAYS AGO

TransCanada Corp. will move forward with a $1.9 billion expansion of its NGTL System to connect incremental supply and expand basin export capacity by one billion cubic feet of natural gas per day at the interconnection with its Canadian Mainline. NGTL expects to begin construction in 2019.

The increme...

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Construction Starts in 2017 Decline 7%

-1 DAYS AGO

Many of the leading U.S. metropolitan areas for commercial and multifamily construction starts showed reduced activity in 2017 compared to levels reported during 2016, according to Dodge Data & Analytics. Of the top ten markets ranked by the dollar amount of construction starts, seven registered...

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Philly Fed: Manufacturing Activity Expanded Solidly

2 HOURS AGO

The index for manufacturing activity in the Philadelphia Federal Reserve region increased 4 points in February to a reading of 25.8. The index has stayed within a relatively narrow range over the past nine months. Nearly 41% of the firms indicated increases in activity this month, while 15% reported...

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Market Outlook 2011: Clear Skies? Wait Until 2012

2011 market outlookMany of the attendees of this year’s Market Outlook, held Aug. 12-13 in San Francisco, came hoping (at last) to hear some good news. The last two years of workshops—put on annually for members by the Valve Manufacturers Association and featuring a dozen economists and industry experts—saw the nation in its worst recession since the depression and most forecasts were pretty bleak.

But probably the most encouraging news to those in attendance is that almost every speaker emphasized they see no double-dip recession in sight.

HIGHLIGHTS AND COMMON THEMES

  • Stimulus packages have helped: Beyond the water/wastewater industry, several other U.S. industries have been helped by federal stimulus, especially those that have to do with building infrastructure. Speakers also pointed out, however, that stimulus packages in other countries have benefited North American industrial manufacturers by creating new markets.
  • Take advantage of low interest rates: Several presenters pointed out that the nation is not likely to see interest rates as low as they were at the time of the fall 2010 workshop anytime soon. While credit is still tight, it’s about to open up, speakers said, so companies should look for ways to take advantage of that situation.
  • Global warming concerns will affect most industries: Almost every speaker this year talked about greenhouse gas and other environmental concerns as well as the possibility of new legislation both at the state and federal levels. From the fact the nuclear industry may benefit because coal is getting a bad reputation, to the effects the Deepwater Horizon disaster will have on drilling, speakers shared new possibilities about what might happen.
  • China has become a better consumer; Brazil a good place to do business: Although it’s still tough to enter the Chinese business world, the country has become a better place to sell for some industries, such as the pulp and paper market, where production of paper goods cannot keep up with Chinese demand. Meanwhile, several speakers talked about developments occurring now in Brazil, including recent discoveries of massive oil deposits in deep-sea, “pre-salt” layers of the earth. Attendees were encouraged to look into finding partners in this business-friendly country.

 

THE DOMESTIC MARKET IS RECOVERING… SLOWLY

Last year, when meeting attendees heard Alan Beaulieu, economist, Institute for Trend Research, speak, “the picture was disturbingly gloomy. But I told you there would be a recovery,” and that recovery has occurred, Beaulieu said. Also: “For those worried about a double-dip recession, relax and take it down a couple notches. Because while there is uncertainty everywhere, there will be no double-dip recession and recovery will be here in 2012,” he said.

However, before meeting attendees could get fully comfortable with that good news, Beaulieu went on to say that the biggest change over last year’s forecast is that “it’s not going to be much more fun” in 2011 than 2010—2011’s move upwards will be milder than originally thought.

The nation’s unemployment rate (which was 9.5% at the time of the outlook workshop) has acted as he predicted last year, which was to stay high, and it may stay that way for awhile, he said.

“You have to look at how many jobs are created in a month. When we get to 200,000 to 300,000 jobs a month, that’s a real recovery,” but at that rate “it will take us three years to create all the jobs we lost, and there is no government initiative out there to help,” he pointed out.

Still, there are many signs that are more positive, Beaulieu said, starting with the lending situation. As far as commercial lending, which is still tight, the competition will begin to heat up soon, and when that happens, standards go down and credit loosens, which “is grease for the economic engine and good things begin to happen.” In the consumer realm, this is already occurring, he pointed out, and commercial is usually right behind.

Regarding inflation, Beaulieu originally predicted it would begin in 2010, but now says “it will hold off until the second half of 2011, but it’s coming.”

Interest rates are at an all-time low, though Beaulieu predicted the trough would be reached soon and then rates will creep upwards until the 2030s, when they may be as high as the Carter years. He advised attendees to “borrow. Invest in anything that will drive your efficiencies and do it in the next six months.”

Meanwhile, manufacturing “is coming back with a vengeance,” he said, pointing to the U.S.’s industrial production figures as well as GDP (gross domestic product) figures that measure rates of change going forward. Both are trending upwards, and demographics for long-term success are favorable in the U.S., he said. For example, the United Nations predicts this nation’s population will grow to 400 million (from 300 million today) by 2050, which compares favorably to places like China, with its birth restrictions and Russia, where the average age is increasing.

Still, Beaulieu had one piece of news that had the audience groaning—he looked down the road 20 years and announced that another great depression is coming—brought on by many factors such as high interest rates, inflation and a government that owes too much. “This won’t be our problem [referring to those at the workshop because of their age], but it will be the problem of the generation behind us,” he said. (Editor’s note: Read our interview with Alan Beaulieu in “Conversation with…” on page 52 of this issue.)

However, he ended by saying that proactive companies, those that look at leading indicators and how their particular companies fit into the current economic picture, will win out over the competition.

“Don’t wait for anyone to make your future. It is up to us to what happens to our world,” he said.

FORECAST: The stock market will return to a bull market going into 2011 and the economy will continue to expand for another six months, but this will not be an easy market in which to make money. Equity will offer a better return than counting on inflation (rising prices). Once inflation hits, lack of spending power may become a problem.

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