06282017Wed
Last updateWed, 28 Jun 2017 5pm

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Lubricants: Always Important—Sometimes Essential

Lubricants: Always Important—Sometimes Essential

Most valve professionals take more notic...

Why Air Valves are Needed in Water Applications

Why Air Valves are Needed in Water Applications

Air valves are hydromechanical devices d...

Achieving Profitability Through Maintenance Management

Achieving Profitability Through Maintenance Management

One of the distinctions between maintena...

Control Valve Positioner Performance Diagnostics

Control Valve Positioner Performance Diagnostics

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Industry Headlines

U.S. Crude, Petroleum Exports Have More than Doubled Since 2010

Wednesday, 28 June 2017  |  Chris Guy

U.S. crude oil and petroleum product gross exports have more than doubled over the past six years, increasing from 2.4 million barrels per day (b/d) i...

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Industry Headlines

Emerson in Talks to Acquire Software Company Paradigm Ltd.

1 DAY AGO

According to Bloomberg , Emerson is in talks to acquire software company Paradigm Ltd. for approximately $1.5 billion.

“Paradigm specializes in seismic data interpretation and imaging equipment to help oil and gas companies know where to drill. The logic of such a deal seems sound and will help Eme...

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VMA Members Lead MDM Top Industrial PVF Distributors List

2 DAYS AGO

Modern Distribution Management (MDM) recently published its Top Distributors list for 2017. Four of the top 5 distributors in the Industrial PVF category ; MRC Global, NOW Inc., Wolseley Industrial Group and FloWorks International; are currently VMA members.

“While oil & gas markets have start...

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U.S. Crude, Petroleum Exports Have More than Doubled Since 2010

5 HOURS AGO

U.S. crude oil and petroleum product gross exports have more than doubled over the past six years, increasing from 2.4 million barrels per day (b/d) in 2010 to 5.2 million b/d in 2016. Exports of distillate, gasoline, propane, and crude oil have all increased , but at different paces and for different...

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Mountain Valley Pipeline Gets Environmental Approval

1 DAY AGO

The Federal Energy Regulatory Commission (FERC) determined that construction and operation of the Mountain Valley Pipeline would result in some adverse environmental impacts, but the majority of these impacts would be reduced to less-than-significant levels. This determination is based on a review o...

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IMF Lowers Forecast for U.S. Growth to 2.1%

7 HOURS AGO

According to the newest forecast from the International Monetary Fund (IMF), growth in the U.S. is expected to rise 2.1% both this year and next, driven by continued solid consumption growth and a cyclical rebound in private investment. In its last forecast the IMF predicted 2.3% growth this year an...

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U.S. Durable Goods Orders Fell the Most in 18 Months

1 DAY AGO

New orders for manufactured durable goods in May decreased $2.5 billion or 1.1% to $228.2 billion, the U.S. Department of Commerce announced. This decrease, down two consecutive months, followed a 0.9% April decrease. Excluding transportation, new orders increased 0.1%. Excluding defense, new orders...

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2009 Market Outlook: Riding Out The Storm

The atmosphere at VMA's Annual Market Outlook Workshop, held Aug. 14-15 in Boston, was more somber than in years' past as attendees-primarily manufacturers of valves, actuators, controls and pumps-listened to speaker after speaker predict continued, even worsening, troubles in the economy, in the United States and around the world.

 

Still, there were a few bright spots among the gloomy news: The power industry in general will remain strong, driven globally by the world's increased need for energy and affected here in North America by the need to tap into new and existing alternative energy sources. Nuclear in particular appears poised to take off in the U.S. as the general public, legislators and other policy-makers accept that nuclear can be a safe, cleaner way to get power. And for the short term, the upstream oil and gas marketplace is actually doing better than predicted a year ago as a reacceleration plays out that may well last into 2009.

Most left knowing that darker times may be coming, but that the North American valve industry has "been there, done that," and with proper preparation and knowledge about new markets and opportunities-global and domestic-their companies can survive this inevitable downturn and come out the other side stronger than ever.

Here's what our speakers had to say:

DOMESTIC ECONOMY
Yes, the Recession is Still Coming

Many people who attended past forecasting conferences were anxious to hear what Alan Beaulieu, economist with the Institute for Trend Research, had to say-not just because he's an entertaining speaker, but because his prediction last year for the U.S. economy was rather bleak-a good 2008, but a recession by 2009.

As far as 2008: "I'm glad you've been enjoying the year," Beaulieu joked, "but the U.S. is softening. Everything you heard in the first half of 2008-all that concern-was just the band warming up."

"This time next year, we will be recognizing that we are in a full-fledged recession," he said. The same will be said in Europe and in China (whether that country recognizes it or not, Beaulieu commented).

Consumers will lead the parade into the downturn, he said, helped along in part by the fact that despite the current woes, we have had poor leadership in this country. For example: "We are a debtor nation. The richest nation on Earth but we can't pay our bills."

Inflation will be a major pressure, he added, because even though officials and experts say the core inflation rate is "only" 3 to 4%, that rate doesn't take into account energy and food. The Consumer Price Index, on the other hand, is 5.6%, which is high, he pointed out.

When people's budgets are hit as hard as they are being hit at present by food, energy and other daily needs, "they stop spending, and that brings a recession," Beaulieu said.

As far as other locations around the globe, "when the U.S. gets a cold, so does the rest of the world," he said.

Still, Beaulieu was not all doom and gloom.

U.S. industry is "doing wonderful things," he exclaimed. They are proficient in selling to the rest of the world, they have the most competitive work force in the world, and they have twice the output of the emerging giant China.

What it will come down to for industry is what's happening at the company level, he said. "If you are doing well, you have to ask: how can I prepare?"

Among his suggestions:

  • Help your margins by differentiating your company from competitors, and then let everyone who works for your company know how you're different.
  • Develop quantifiable reasons you are better than your competition. "What people want in a downturn is a metric. [They want to hear:]
  • 'I can fix this problem on the first go-around, and I can fix it in four hours, not six,'" Beaulieu explained. Clients want to know that quality is more than an adverb.
  • Consider taking on subcontract work if the backside of the cycle begins to look recessionary.
  • Begin missionary efforts into new markets.
  • Freeze expansion plans unless they are related to the logical next step for a particular company. If those plans are made just to expand the company's reach, rethink those plans.

When things start leaning into a recessionary cycle, Beaulieu suggested:

  • Begin reducing work forces. Don't tell employees that everyone will keep their jobs, but let them know most people will be okay-we've been through this before.
  • Set budget reduction goals by department.
  • Avoid long-term purchasing commitments.
  • Find a way to do business in the counter cyclical or unaffected areas (e.g. energy, travel, green, Canada/exports, higher education, healthcare, etc.).

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