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Southern States Looking Forward to Continued Growth in 2015

Jan. 22, 2015

Trying to predict what 2015 will bring is difficult, but based on experience and trends in various industries that utilize welding, the outlook is stable and positive in the southern U.S. Commercial Construction has been on an upswing for the last few years and is expected to continue during 2015. This is welcome news after weathering the economic storm this industry faced back in 2008-2009. Continuous demand from structural steel manufacturers is expected to persist this year. In Atlanta Georgia, two new stadiums (both for the Falcons and the Braves) are being built which will bolster this growth. The automotive industry has been exceptionally strong in the southeast over the last several years and will endure in 2015. Although much of the automotive manufacturing is done robotically, Bug-O benefits from support industries, as well as the structural side of plant expansion like the 1 billion dollar edition being built at Mercedes in Alabama.

   
Bug-O Systems has no different crystal ball than anyone else, however I can tell you what we see, hear and read. We all know that gasoline prices at the pump are less than half of what they were historically. Consumers love that they can fill their vehicles for half of what they once did and so they find that they now have extra money to spend on their families. What is good on one hand may not be on the other hand. Oil prices per barrel have dipped down below the $50 per barrel price, yet API (American Petroleum Institute) has printed articles stating that “2015 will be the largest oil production year in history since 1972.” So what does this all mean? We are told that the requests for new oil exploration permits overall is down in North America. However, that does not have anything to do with refineries producing more refined oil so perhaps API prediction is correct. In Canada we see reports of new field storage tank construction to be the highest in many years. 
 
Two factors of some concern in 2015 are the price of oil and the slowing of both European and Asian economies. Low oil prices are great for filling up the gas tank and it will be good for the consumer as a whole. People will have more money to spend on flat screen T.V.’s, iPhones and electronics, but the price of oil staying low is not positive for the welding industry. Although drilling does not occur in the southeast, lots of vessel manufacturers, pipeline contractors, and many other businesses that support upstream oil and gas are located here. If oil prices stay low this could slow down this industry sector. Judging from past oil trends, the price of oil will increase but may take some time to do so.
 

In general from the commercial construction industry to structural steel manufacturing and the automotive industry, the outlook for growth in 2015 is positive in the southern U.S. Although currently the price of oil is low, given a little time, oil will increase to pick up and aid the businesses that support upstream oil and gas in this region.

 

Tripp Gorman – Regional Manager- Southeast

email: tripp@gorman-sales.com