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Plastic pipe will continue to dominate market in years ahead

BY Brae Canlen

The nation’s aging water pipe network, coupled with a turnaround in building construction, will boost the annual demand for pipe by 6.3%, according to a report by the Freedonia Group, a Cleveland-based industry market research firm.

Plastic pipe will experience the fastest growth through 2016. Resin improvements that enhance performance will enable plastic pipe to continue to take market share from other pipe materials. Additionally, processing improvements will allow plastic pipe to be a more cost-effective option compared with other materials.  Polyvinyl chloride (PVC), which accounted for more than one-half of all plastic pipe demand in 2011, will remain the leading plastic resin based on PVC’s use in small diameter applications in the potable water distribution, sanitary sewer and agricultural markets, according to the report. Going forward, PVC demand will increase at a nearly double-digit rate, benefiting from the recovery in building construction activity.

High density polyethylene (HDPE) pipe was the second leading plastic pipe in 2011. Advances in HDPE pipe demand will result as the material continues to supplant concrete.

Steel pipe will continue to be the leading pipe material in value terms, accounting for $28.5 billion in 2016.  However, growth in steel pipe demand will trail the pipe market as a whole, since it is not a beneficiary of the rebound in housing construction. Nevertheless, steel will continue to dominate the oil and gas market and is expected to benefit from continued exploration and drilling activity — especially in shale gas plays. 

Concrete, ductile iron and copper pipe are all forecast to post above-average growth. Concrete and ductile iron pipe maintain a commanding share of the large diameter sewer, drainage and water transmission market, while copper is the primary material used in refrigeration equipment.

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Frank Blake addresses Virginia Commonwealth University

BY Brae Canlen

Home Depot chairman and CEO Frank Blake addressed the Virginia Commonwealth University School of Business on Oct. 25, joined by his son, Home Depot district manager Frank Blake Jr., who also serves as an adjunct professor in the School of Business’ Executive M.B.A. Program. The senior Blake spoke as part of the business speaker series at the Charles G. Thalhimer Family Executive-in-Residence program.

Blake talked about the steps to building a workplace culture, using Home Depot as an example. He touched on the now-familiar model of the inverted pyramid, where customers sit at the top, above front-line employees and then field support and the corporate office. The CEO’s office is the foundation — and the bottom level — of the pyramid.

Prior to become the home improvement retailer’s top executive, Blake previously served as deputy secretary for the U.S. Department of Energy (DOE), and prior to that, he worked in a variety of executive roles at General Electric. His public sector experience also includes having served as general counsel for the U.S. Environmental Protection Agency (EPA), deputy counsel to Vice President George Bush and law clerk to Justice John Paul Stevens of the U.S. Supreme Court. 

 

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Pending home sales rose 0.3% in September

BY HBSDealer Staff

The Pending Home Sales Index, a forward-looking indicator based on contract signings, edged up 0.3% to 99.5 in September from 99.2 in August and is 14.5% above September 2011 when it was 86.9. The data reflect contracts but not closings. 

"Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range," said Lawrence Yun, NAR chief economist. "This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013." 

Pending home sales have risen for 17 consecutive months on a year-over-year basis. In September, all regions showed double-digit increases in contract activity from a year ago with the exception of the West.

The PHSI in the Northeast rose 1.4% to 79.3 in September and is 26.1% higher than a year ago. In the Midwest, the index fell 5.8% to 89.5 in September but is 19.3% above September 2011. Pending home sales in the South increased 1.0% to an index of 111.5 in September and are 17.6% higher than a year ago. In the West, the index rose 4.3% in September to 106.9, but is only 0.8% above September 2011. 

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