Construction Market Forecast

While 2009 was likely the bottom in terms of percent decline, 2010 will be the bottom in terms of dollar volume, according to the folks at FMI Corp., management consultants to the construction industry. Residential construction is expected to begin recovering in this year. Nonbuilding construction will continue to be a positive contributor, increasing another 5 percent, driven mostly by conservation and development construction.

The economy may show some signs of improving, but it is just the beginning of the downfall for nonresidential construction. Nonresidential construction typically lags the general economy by about 18 months. Intense competition has been bringing down prices. This is good for owners, but not so good for contractors. Nonbuilding construction will remain positive for the forecast period with power and conservation and development leading the sector.

The residential sector is expected to begin to recover this year. Single-family put-in-place construction will recover at a slower rate than single-family housing starts. The number of square feet per start is declining, meaning that new homes are getting smaller. They also are getting less expensive. The average and median new home sale price is decreasing.

Other highlights of FMI’s recent forecast:

Commercial construction relies heavily on consumer spending and new housing construction. Consumer spending will not return to high levels until the employment situation improves. Commercial construction is not expected to pick up until 2012.

Health care construction likely will see a small increase this year and next, remaining at a historically high level.

Power construction has seen 4 years of phenomenal growth and is expected to remain positive for the next 5 years.

Conservation and development construction is one of the few surprise winners from the stimulus bill.

Clarifying Geothermal Terminology

Most people understand the broad concept of what “geothermal” means, but there are distinctions to be made. Like when you mention “drilling” – some people actually envision someone standing at a workbench holding a $75 hand tool.

As geothermal increasingly has become more mainstream, we need to do a better job of defining what is being discussed. This is no small matter to Ralph Cadwallader, who “just hates the fact that there is confusion, and not enough understanding of what I do and love.” Cadwallader is CEO of Loop Tech Intl., Huntsville, Texas, and he took some time to discuss the issue and share his thoughts:

“I want to help folks understand that the word ‘geothermal,’ in reference to energy, has two very distinct origins,” Cadwallader explains. “There is massive confusion, or should I say little differentiation, of the two very distinct fields of pursuit in the media. I feel it is time to help clear the air.

“On one hand, you have the hot rocks, or ‘Big G,’ which involves the guy who seeks to harness the unlimited high energy source called ‘magma’ found beneath the earth’s relatively thin crust. Magma is a complex, high-temperature (1,300 degrees F to 2,400 degrees F) fluid substance. The Big G is (deep) energy that is brought up to drive electric turbines or used as direct heat. You can read of places where the entire community’s heating system is directly connected to the one source.

“On the other hand, you have the ‘Little G,’ which involves the guy, like myself, who seeks to recycle energy by using the solar energy that is stored in the earth’s shallow depths of 500 feet of subsurface, including bodies of water. The idea of geoexchange (geothermal, ground source heat pump, earth coupled) is that we can capture the energy that already exists and recycle it. Geoexchange is nothing more than circulating water across a hot refrigerant removing the energy from a conditioned space and storing that energy in the ground for winter use. The earth’s thermal mass will store the energy to heat the refrigerant when the reversing valve calls for heating. Reclaiming or recycling energy that already exists is just as important as finding new energy, and that is what I help my clients do.”

To provide a visual, Cadwallader says to visualize the earth as an egg. “The shell is the earth’s crust, and the source of energy in the upper layers originates from the sun. Geoexchange takes place in the upper layers, thus ‘Little G.’ The Earth’s mantle and core can be compared to the yoke and white of the egg. The ‘Big’ geothermal energy originates from magma in the core of the Earth. Both geothermal resources have tremendous advantages, and are being applied across the globe. As the infrastructure continues to grow, so does the industry, but there is a difference in geothermal/hot mass and geothermal/surface mass. I suppose the word needs to get out that geoexchange describes my industry better. Would there be less confusion between the two if we had labeled one ‘geothermal’ and the other ‘geothermic?’ I prefer ‘geoexchange’ for the recycled stuff, the title given to the industry by the Geothermal Heat Pump Consortium.”

Franklin’s Pheifer Gets Texas Tribute

Franklin Electric’s Randy Pfeifer was awarded the 2010 Texas Ground Water Association (TGWA) President’s Award. Raymond Whise-nant Jr., TGWA president, presented the award given “For Outstanding and Dedicated Service to the Ground Water Industry of Texas and the Texas Ground Water Association.” Pfeifer has been with Franklin Electric for 28 years, and is Franklin Electric’s territory manager covering west Texas. He was chosen to receive the award for his diligence in providing education and training to the industry, honesty, hard work and many beneficial relationships among peers, customers and competitors.

Get the Latest on Micropiles

The Deep Foundations Institute and ADSC: The International Association of Foundation Drilling are co-sponsoring a seminar covering trends and developments in the micropile industry. The event takes place Thursday, April 8 at the Hilton Toronto Airport Hotel (905-677-9900; $119 per night). The cut-off date for discounted registration ($345) is March 15. Exhibit space will be available. Get all the details at www.dfi.org.

Rotary Head Exchange Program

Starting March 1, TEI Rock Drills will begin a program to replace existing RDS528H rotary heads with its new RDS350 rotary head. Also note that as of March 1, TEI Rock Drills will no longer offer support for the RDS258H heads. 

Here is how it works:

• Return your old RDS528 head to TEI, freight prepaid.
  
  
• TEI will send you a new RDS350 at a 20-percent discount, freight prepaid.

It’s that easy. Simply call your salesperson to arrange the switch. 
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