The United States’ 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.
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. These and other trends are presented in Large Diameter Pipe, a new study from The Freedonia Group Inc., a Cleveland-based industry market research firm.
Sewers – including both storm and sanitary sewers – 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 will also 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.
Steel and concrete 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 most rapid gains in demand through 2015 will be for ductile iron pipe, driven by robust growth in the water and sanitary sewer markets. However, as with concrete, the bulk of these advances will be regaining demand levels lost during the 2007-2009 recession. Over the long term, the most favorable growth prospects are expected for large diameter plastic pipe, most notably high-density polyethylene (HDPE), but also polyvinyl chloride (PVC) and fiberglass pipe.