U.S. demand for large-diameter pipe to exceed $8 billion in 2015, says study

Source: The Freedonia Group

The nation’s demand for large-diameter pipe—defined as pipe with a diameter of 15 inches or more—will rise 6.2 percent per year to $8.2 billion in 2015, according to trends presented in Large Diameter Pipe from The Freedonia Group.

Concrete and steel were the leading large-diameter pipe materials in 2010, combining to account for about two-thirds of total demand. However, steel will be the slowest-growing pipe material in value terms through 2015, restrained by moderating price increases, a deceleration in oil and gas applications, and market maturity in steel sewer pipe. Concrete pipe will fare better, rising at an above-average pace and rebounding from significant declines in demand during the 2005-2010 period. The study predicts a 2010-2015 increase for concrete pipe shipments of 7.1 percent, to $2.6 billion.

Overall gains will rebound strongly from the declining demand experienced during the 2005-2010 period, in which large-diameter pipe markets were negatively impacted by the 2007-2009 recession. Going forward, rising demand will be fueled by a more favorable environment for public infrastructure spending, as state and municipal governments faced severe budgetary constraints in 2010 that caused many major projects to be delayed.

Sewers—both storm and sanitary—will remain the leading outlet for large-diameter pipe through 2015, accounting for about half of total demand. Sanitary sewers will be the faster growing of the two sectors, with advances bolstered by rebounds in building construction spending and public infrastructure investment. These factors also will drive rapid gains in demand for large-diameter drainage and water transmission pipe. Demand advances for oil and gas pipe—one of the few markets to see healthy growth during the 2005-2010 period—will decelerate through 2015, as pipeline construction activity slows, although the development of unconventional gas resources will continue to provide opportunities.

Additional details on Large Diameter Pipe, priced at $4,900 from The Freedonia Group, are available from Corinne Gangloff, 440/684-9600; fax: 440/646-0484; e-mail: [email protected];www.freedoniagroup.com.