Underground Construction - June 2022 - 6

EDITOR'SLOG
Strange Days
Robert Carpenter | Editor-in-Chief
actual dollars reach the market and are
distributed. But between inflation and
wage hikes, not to mention continued
supply chain issues, the money will not
go nearly as far as it was envisioned less
than a year ago.
I think it's safe to say that most people
in the underground utility and pipeline
industry entered 2022 hoping for
a strong rebound and return to a much
sought-after normal year. Ironically,
2022 has proven to be a year beset by
bizarre challenges, yet still sugar-coated
with financial windfalls.
How you are feeling about the complexity
of industry market situations depends
upon your area of focus. Emotions
range from depression to elation to frustration.
Yet, there remains signs of hope
and improvement. Fingers are crossed
the second half of 2022 continues to
prosper and brings relief to certain markets,
like sewer/water, fiber and electric.
For the underground industry, the
Infrastructure Bill was a huge step in
the right direction. It will provide a
long-overdue dose of support to markets
struggling to keep up with demand. As
we've said in the past, fiber needed to follow
the path of the electric and telephone
industries, in order for rural areas to join
the fiber generation. Thanks to billions
from the Infrastructure Bill, that process
should take a big step towards reality.
There are numerous big plans - as to
be expected - for infrastructure spending,
which is just now really getting started.
The second half of 2022 should see a
heavy materialization of projects, as the
6 JUNE 2022 | UCONonline.com
With soaring inflation impacting everything
from food to fuel, the cost of
doing business has taken a major hike.
Wage inflation from workforce shortages
further increase project costs. Yet
contractors, consulting engineers and
owners are willing to raise the pay bar
and even offer bonuses, if it means getting
people to work.
While these issues impact all areas of
the underground infrastructure markets,
the horizontal directional drilling industry
is an amazing paradox in and of itself.
In this issue of Underground
Construction, we present our exclusive
24th Annual HDD survey. No surprise
that it represents a dichotomy of market
conditions and opportunities. On
the one hand, fiber and electric work are
booming at levels not seen since 2000,
driving a robust market for small rigs,
tools, mud, etc. But the large rig market
is experiencing tough times.
In 2022, one would normally expect
an increase in small rig sales with the redhot
fiber work. However, the infamous
supply chain issues have slowed production
and lead times for many models.
Consequently, the forecast is a slight decrease
in small rig sales, even though in
a " normal " year, sales would probably be
increasing in the 5 to 8 percent range.
As we've discussed, supply chain issues
continue to limit the amount of equipment
that is available for the strong markets.
Inflation has raised costs and worker
shortages compound market challenges.
One fiber contractor commented to
our survey that manufacturers are almost
embarrassed to discuss business. " It's like
they don't want to talk to me because
they're afraid they don't have what we
need, or they don't want to tell me just
how long the wait is going to be. "
On the other hand, large rig operators,
who work primarily in the energy
pipeline markets, have run into
nothing less than a brick wall, as the
Biden Administration and its allies
in Congress have declared an all-out
war on traditional oil and gas markets.
President Biden has picked up the Al
Gore mantra of green at all costs. That
course has proved extremely costly, indeed,
and there is no end in sight. The
reality is that there is a middle ground
to be had but, apparently, that option
is being ignored. There are debts to be
paid to the green movement, no matter
the suffrage for the American people.
The bitter irony is President Biden
continues to beg for increased oil from
Saudi Arabia and other OPEC members
who scoff at his overtures. The
Administration also persists in the folly
of obtaining more oil from the Socialist
dictatorship of Argentina and the outlaw
country of would-be nuclear power Iran,
which openly wants nothing less than
the total annihilation of the U.S.
The energy situation has become so
ludicrous that it's difficult for ordinary
people to perceive. One big rig operator
replied to the survey, stating that with
the price of oil and gas, " one would expect
there to be a lot of pipeline work
trying to distribute energy around the
country. But the opposite is true. "
For supply chain and inflation challenges,
there does appear to be progress
- albeit slowly. As signs of improvement
slowly spread hope in the form of clarity
and enhanced market conditions,
let's pray that our leaders remember
the particularly important lesson we've
all been taught the hard way in recent
years: divisive politics and a pandemic
don't mix. UC
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Underground Construction - June 2022

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