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Young Valve Professionals: Logan Moore

Young Valve Professionals: Logan Moore

In 2014, VMA's leadership created the Va...

VALVE Magazine: Readers' Choice 2017

VALVE Magazine: Readers' Choice 2017

Happy New Year to our VALVE Magazine rea...

Educational Opportunities Abound at New VMA Knowledge Forum

Educational Opportunities Abound at New VMA Knowledge Forum

From technical to manufacturing to human...

Offshore Production in a Low Oil-Price Environment

Offshore Production in a Low Oil-Price Environment

Three years ago, The Washington Post publi...

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Industry Headlines

Emerson Completes Acquisition of ProSys, Inc.

Thursday, 18 January 2018  |  Chris Guy

Emerson has acquired ProSys Inc., a global supplier of software and services that increase production and safety for the chemical, oil & gas, pulp &...

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Interior Coatings for Waterworks Valves

Interior Coatings for Waterworks Valves

Monday, 15 January 2018  |  John V. Ballun, P. E.

Since the 1990s, two types of epoxy coatings have been commonly specified and used for iron valves in the waterworks industry: fusion-bonded epoxy and...

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Industry Headlines

Emerson Completes Acquisition of ProSys, Inc.

10 HOURS AGO

Emerson has acquired ProSys Inc., a global supplier of software and services that increase production and safety for the chemical, oil & gas, pulp & paper and refining industries. ProSys complements Emerson’s May 2017 acquisition of MYNAH Technologies, which provides simulation and opera...

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ASCO Valve and Numatics Now Doing Business as ASCO, L.P.

2 DAYS AGO

Effective January 1, 2018, ASCO Valve, Inc. and Numatics, Inc. began doing business as ASCO, L.P. This change in legal entities affects neither current channel alignment nor purchasing processes—everything will remain the same, including product authorizations. Within ASCO, a business unit of Em...

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EIA Predicts Record U.S. Fossil Fuel Production

11 HOURS AGO

In its January 2018 Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that total fossil fuels production in the U.S. will average almost 73 quadrillion British thermal units (Btu) in 2018, the highest level of production on record. EIA expects total fossil fuel prod...

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TransCanada Proceeding with Keystone XL Pipeline

12 HOURS AGO

TransCanada Corp. has successfully concluded the Keystone XL open season, securing approximately 500,000 barrels per day of 20-year commitments, positioning the proposed project to proceed . Interest in the project remains strong and TransCanada will look to continue to secure additional long-term con...

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U.S. Industrial Output Rose 0.9% in December

15 HOURS AGO

Industrial production rose 0.9% in December even though manufacturing output only edged up 0.1%. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total indus...

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Beige Book: Modest to Moderate Growth Prevalent Across U.S.

15 HOURS AGO

According to the Federal Reserve Beige Book, reports from the 12 districts indicated that the economy continued to expand from late November through the end of the year, with 11 districts reporting modest to moderate gains and Dallas recording a robust increase. The outlook for 2018 remains optimistic...

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2009 Market Outlook: Riding Out The Storm

The atmosphere at VMA's Annual Market Outlook Workshop, held Aug. 14-15 in Boston, was more somber than in years' past as attendees-primarily manufacturers of valves, actuators, controls and pumps-listened to speaker after speaker predict continued, even worsening, troubles in the economy, in the United States and around the world.

 

Still, there were a few bright spots among the gloomy news: The power industry in general will remain strong, driven globally by the world's increased need for energy and affected here in North America by the need to tap into new and existing alternative energy sources. Nuclear in particular appears poised to take off in the U.S. as the general public, legislators and other policy-makers accept that nuclear can be a safe, cleaner way to get power. And for the short term, the upstream oil and gas marketplace is actually doing better than predicted a year ago as a reacceleration plays out that may well last into 2009.

Most left knowing that darker times may be coming, but that the North American valve industry has "been there, done that," and with proper preparation and knowledge about new markets and opportunities-global and domestic-their companies can survive this inevitable downturn and come out the other side stronger than ever.

Here's what our speakers had to say:

DOMESTIC ECONOMY
Yes, the Recession is Still Coming

Many people who attended past forecasting conferences were anxious to hear what Alan Beaulieu, economist with the Institute for Trend Research, had to say-not just because he's an entertaining speaker, but because his prediction last year for the U.S. economy was rather bleak-a good 2008, but a recession by 2009.

As far as 2008: "I'm glad you've been enjoying the year," Beaulieu joked, "but the U.S. is softening. Everything you heard in the first half of 2008-all that concern-was just the band warming up."

"This time next year, we will be recognizing that we are in a full-fledged recession," he said. The same will be said in Europe and in China (whether that country recognizes it or not, Beaulieu commented).

Consumers will lead the parade into the downturn, he said, helped along in part by the fact that despite the current woes, we have had poor leadership in this country. For example: "We are a debtor nation. The richest nation on Earth but we can't pay our bills."

Inflation will be a major pressure, he added, because even though officials and experts say the core inflation rate is "only" 3 to 4%, that rate doesn't take into account energy and food. The Consumer Price Index, on the other hand, is 5.6%, which is high, he pointed out.

When people's budgets are hit as hard as they are being hit at present by food, energy and other daily needs, "they stop spending, and that brings a recession," Beaulieu said.

As far as other locations around the globe, "when the U.S. gets a cold, so does the rest of the world," he said.

Still, Beaulieu was not all doom and gloom.

U.S. industry is "doing wonderful things," he exclaimed. They are proficient in selling to the rest of the world, they have the most competitive work force in the world, and they have twice the output of the emerging giant China.

What it will come down to for industry is what's happening at the company level, he said. "If you are doing well, you have to ask: how can I prepare?"

Among his suggestions:

  • Help your margins by differentiating your company from competitors, and then let everyone who works for your company know how you're different.
  • Develop quantifiable reasons you are better than your competition. "What people want in a downturn is a metric. [They want to hear:]
  • 'I can fix this problem on the first go-around, and I can fix it in four hours, not six,'" Beaulieu explained. Clients want to know that quality is more than an adverb.
  • Consider taking on subcontract work if the backside of the cycle begins to look recessionary.
  • Begin missionary efforts into new markets.
  • Freeze expansion plans unless they are related to the logical next step for a particular company. If those plans are made just to expand the company's reach, rethink those plans.

When things start leaning into a recessionary cycle, Beaulieu suggested:

  • Begin reducing work forces. Don't tell employees that everyone will keep their jobs, but let them know most people will be okay-we've been through this before.
  • Set budget reduction goals by department.
  • Avoid long-term purchasing commitments.
  • Find a way to do business in the counter cyclical or unaffected areas (e.g. energy, travel, green, Canada/exports, higher education, healthcare, etc.).

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