2023 horizontal directional drilling outlook remains strong

Investment in infrastructure continues to elevate the horizontal directional drilling (HDD) outlook to new heights.

Emerging from the pandemic, the domestic trenchless industry looks a little different in 2023 than it did before 2020. As vice president of utility and environmental commercialization for Vermeer Corporation, Dave Wisniewski closely monitors trends that may impact the HDD market outlook and future opportunities for contractors and manufacturers.

In the early 2000s there was the telecommunications buildout. It was a rapid growth period that helped expand the HDD market. The industry has experienced several growth spurts since this time.

According to Wisniewski, “The state of trenchless is as strong as I have seen it in my 25 years. Trenchless technology is currently experiencing a period of strong growth across multiple markets, including telecommunications, gas distribution and power. These markets are seeing significant investments from both the public and private sectors, with many projects underway or in the planning stages. In particular, the telecommunications market is experiencing a massive growth mode. This will continue, especially with the government funding for infrastructure already being put into place.”

The HDD market outlook remains positive since this industry is well positioned to meet the needs of growing markets. However, it’s not all positive news. After the pandemic hit, many parts of the world witnessed a dip in new oil and gas pipeline construction projects. In addition, there is a shortage of workers to keep up with the volume of work available.

HDD technology continues its advance

“We consider ourselves a market leader, specifically in horizontal directional drilling technologies. The acceptance of HDD as a trenchless technology has increased over the years. In the telecommunications space, the natural gas distribution space, most of those projects are being done with directional drilling today, particularly in urban environments,” said Wisniewski.

Wisniewski shared that the capabilities of trenchless technology have grown along with the technology itself. Users can now be much more exact in drilling around utilities. The drill head can be precisely located. Planning and mapping products allow users to better understand and preplan directional drilling bores.

HDD market outlook by drill size

Every market has unique requirements that dictate the most appropriate drill. Mid-size drills are often defined as units with 20,000 lb to 60,000 lb (89 kN to 267 kN) of thrust and pullback, with small-size drills having less and large-size drills having more. The HDD market outlook for each drill size can be determined by looking closely at each application. For instance, telecommunications work drives the small- and mid-size drill market with heavy demand as that market rapidly expands. Gas distribution has been a very steady growth market for mid- and small-size drills over the years and continues to be strong.  

Larger HDD drills are typically used in the traditional oil and gas market. This market has slowed down a bit but remains steady. New markets, including water and sewer, are coming on board and driving significant HDD growth.

Recently there is a growing trend to harden the electrical grid in preparation for climate-related events. With a lot of power being placed underground, these projects often require mid- and large-size drill rigs. There is also an increase in offshore wind power installation projects.

Growth across entire spectrum creates strong HDD market outlook

The HDD market outlook remains as busy as it has ever been. Across the market there is plenty of activity, a lot of domestic government funding and substantial growth projected.

The industry experienced significant supply-chain challenges since COVID-19 with backlogs in the marketplace. Those backlogs still exist to an extent, but they have begun to recover and heal themselves. There will be lingering supply-chain issues for months as the industry moves toward a point where it can produce a little more than what is demanded.

“We are really encouraged by the number of projects taking place today. On the telecommunications side, there are public and private projects on the books that are currently in the process of being built out. We see that improving with money coming out of various government programs,” said Wisniewski.

Future investments continue to drive growth. The infrastructure projects already booked for the next five to 10 years will create a strong demand for equipment.

Labor-saving advancements are a priority

Besides equipment availability, the continued labor shortage will have an outsized influence on the HDD market outlook. OEMs will be focused on solutions to help alleviate its impact.

“The people piece is going to be the biggest challenge across the board. It is not just this industry; it is every industry that Vermeer sells into. Every one of them faces labor challenges,” said Wisniewski.

Vermeer recognizes that the industry requires operator training assistance and more efficient equipment to help onboard new operators and improve productivity. With all the money invested in infrastructure projects over the next couple of years, finding the people to do the work will be a challenge.

Electric innovation on the horizon

Vermeer is exploring electrification as a solution to help reduce the carbon footprint and sound levels on jobsites, as well as other benefits. The company recently acquired electric-powered HDD and fluid systems technology from Normag in the Netherlands. Through this acquisition, Vermeer assumes the rights to develop, manufacture and distribute the proven fully electric HDD rigs and fluid management systems currently operating across Europe under the Normag brand.

“Electrification is a direction that will be beneficial to the HDD marketplace, starting with large drills. These offerings give contractors a complete system option on projects that call for electric equipment solutions,” said Wisniewski.

Benefits of electrification can include reduced sound and the ability to replace hydraulic systems with electric systems.

Data drives efficiency

Finally, the generation and collection of data is another area of focus for the industry. Vermeer recognizes the importance of data in helping locate and permanently mark utilities and in improving construction-process efficiency.

Data enables calculating the total cost of ownership. As more data is collected, owners will be able to draw more conclusions and provide more information to their crews to help them manage the jobsites.

In summary, the HDD market outlook is strong, with growth across multiple applications. Owners and operators are facing many challenges, but Vermeer is working to provide solutions to continue market growth. Contact your local Vermeer dealer to learn more about HDD applications.

Vermeer Corporation reserves the right to make changes in product engineering, design and specifications; add improvements; or discontinue manufacturing or distribution at any time without notice or obligation. Equipment shown is for illustrative purposes only and may display optional accessories or components specific to their global region. Please contact your local Vermeer dealer for more information on machine specifications.

Vermeer and the Vermeer logo are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries. © 2023 Vermeer Corporation. All Rights Reserved.

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