Last updateTue, 24 Nov 2015 6pm


Trends & Forecasts

Highlights from API’s Tanks, Valves and Piping Conference 2015

Highlights from APIs Tanks Valves and Piping Conference 2015At this year’s API Tanks, Valves and Piping Conference and Expo in Las Vegas, Oct. 14-15, more than a dozen presenters shared their expertise in the installation, repair and maintenance of valves, pipes and tanks. Those in the valve track delved into the challenges of interpreting and meeting standards for valves while ensuring the safety and profitability of their enterprises. As is the case in most any gathering of valve professionals, the subject of fugitive emissions was uppermost on the minds of many, as was ensuring the safety and profitability of refineries, pipelines and chemical process plants in the face of a challenging economic environment.

Commercial Construction on the Rise

commercial construction 2rev“While single family building normally dominates the construction market, right now, multi-family building is on fire!” said Richard Branch of Dodge Data and Analytics during his opening statement at the 2016 VMA Market Outlook event held in August.

commercial contruction 1Retail and Warehouses

According to Branch, the trend toward urban as opposed to suburban living has had an effect on commercial construction, noting that retail construction is lagging because, over the last 10 years, it was tied to single family construction. “With less demand for homes, that means less need for malls,” he said.

“Less suburban growth means the number of square feet for new retail projects is much smaller. There is a greater proportion of mixed-use projects composed of offices/hotels/multi-family buildings in the cities, but inside of them is a semblance of retail construction. The footprint is smaller, so the value is smaller. The next several years will be a challenging environment for retail construction,” he predicted.

“On the other hand,” Branch continued, “Retail renovation is gaining ground. Back in 2007, retail builds were new, but now, they are doing more renovations. More than 40% of this activity in 2014 was renovation and will continue in 2015, 2016. And the retail sector has also been affected by online sales.

“We can see it now from outlets like Home Depot and Lowes. They are investing in their online presence at the expense of brick and mortar stores. All that online shopping has been a boon for warehouse construction.” Branch pointed to the huge uptick in warehouse construction on the east coast, partly because of a bigger, wider, deeper Panama Canal. “Vacancy rates in warehouses are low across the board,” he said.

Hotels and Convention Centers

Branch had good news for those involved in the hospitality industry. “Travel is improving,” he said. “As we look at the next 18 months of growing leisure and business travel, there will continue to be a bigger construction trend on hotels, and many of them are in the upgrading cycle. There are a lot of high-end properties, casinos and convention center hotels.”

Office Buildings

Three big trends are impacting this sector:

  1. Data Centers: As more companies are pushing data into the cloud, there is a need for more office space to hold the servers and people that manage the cloud storage.
  2. Flagship corporate headquarters like Toyota’s corporate campus being built in Plano, TX.
  3. Government centers including the 2.1 million square foot facility for the new FBI headquarters.

“We’re starting to see more speculative construction,” said Branch. “That is good news for the office construction market in addition to the fact there were 500,000 new office jobs last year, and next year we expect 750,000 more. That helps fill that space built on speculation.”


“There are stirrings of improving public finances, which are enhancing the outlook,” said Branch. “Growth is expected in 2015 and 2016, but from our perspective, that is all in the education side. College and university construction has grown as gains in the stock market have fueled endowment growth. Most of that building has been in amenity construction. There is also growth in the kindergarten through Grade 12 market. It was 3.5 times the size of the post-secondary market.”

Enrollment growth ultimately drives activity for many segments in education building starts. In the U.S., the enrollment increase is skewed toward the south and west segments of the country. However, according to Branch, many of the K through 12 schools in the east are old and in poor condition, so even though there is not much population growth in those states, they do need to fix up old properties.

Healthcare building is mostly on hold, according to Branch. “The population is aging, but construction activity has been flat mostly because of uncertainty in the health care sector. There aren’t as many big projects, and there is a great deal of uncertainty around Obamacare. Decisions are being postponed until after the election.”

There are more urgent care facilities and clinics, but that is not usually new construction. “Because of high vacancy rates in the retail market, clinics are locating in strip malls and shopping malls,” said Branch.

commercial construction 3


In the first six months of 2015, the number of commercial projects in bidding were flat or down, but there were more projects entering the planning phase in that time period. “As they go into bidding,” said Branch, “This is the big opportunity for valve manufacturers to be aggressive in marketing to the non-residential, office/warehouse/hotel sales and marketing sectors.” Branch anticipates that valve shipments to commercial and institutional construction will see double-digit growth for 2015 and 2016.

Total Construction is expected to be up 14% in 2015, generally in the office, warehouse and hotel sectors, but the growth rate will slip a bit in 2016 due mostly to the cancellation of LNG export facilities that were planned.

Kate Kunkel is senior editor of VALVE Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..

2016 Market Outlook: Mostly Cloudy

mow 2016 1 newWhile the shale gas boom continues to play an important part in the economic well-being of the United States, it was the price of oil that was foremost in the minds of presenters and attendees alike at VMA’s 2016 Market Outlook event held in Chicago this month.

Leadership: The Essential Ingredient to Lean Transformation

image1The 2015 VMA Manufacturers Workshop featured a two-day intensive workshop on Lean Leadership. All of the sessions at this year’s conference, held April 30-May 2 in Nashville, TN, were designed to help managers, supervisors and team members acquire a more functional understanding of the key leadership skills needed to facilitate and sustain a lean transformation. That is achieved when leaders have the skills essential to successfully implement the lean philosophy and they must work collaboratively with different personalities and styles to create a cohesive workforce that focuses on lean processes (striving to become more efficient and precise). The ultimate goal of lean leadership is a workforce fully committed to the approach and driven by principles focused on problem solving, effectively implementing change, defining and achieving goals, and being more accountable.

In the lean way of doing things, leadership is not a position, it is a relationship and leadership is everyone’s business. It is a set of skills and abilities, and to develop as a leader means to develop the self. This has profound implications for those in leadership positions. It is important for management to be committed to and understand the importance and role of employee training and education. To make that training valuable, it must also be implemented properly and leaders must set realistic expectations.

Advances in Desalination Technology

Advances in Desalination TechnologyMore than 750 million people currently lack access to clean water worldwide. That is a statistic that generally doesn’t affect too many people in North America, but the 10-year drought in Texas and the current situation in California are bringing attention to the fact that even the wealthiest of nations can have water-related shortages.

In the United States, 60% of well and surface water goes to industry and agriculture consumes 30% of water used. While conservation efforts may alleviate some of the supply problems, continually increasing demands on this resource are pressing the boundaries of technology to come up with new solutions.



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