Trenchless Technology

JAN 2019

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40 T R E N C H L E S S T EC H N O LO GY JA N UA RY 2019 T H E C O N S T R U C T I O N M A R K E T in the United States is booming amidst the second longest period of sustained economic expansion since 1964. Despite fears of an impend- ing slowdown, FMI Research projects that construction put-in-place will in- crease year-over-year by 6 percent in 2018 (up from 5 percent in 2017). The industry continues to be bol - stered by strong growth in the resi- dential construction segment—driven by near-full employment , wage im- provement , and housing supply short- age. While the residential segment 's growth rate is beginning to deceler- ate, FMI speculates that the influx of first- time, millennial homebuyers will continue to push demand. Infrastruc- ture construction spend—particu- larly related to transportation (e.g ., airport , mass transit , railroad, water ports) and nonbuilding structure con- struction (e.g ., power, highway, water, sewer)—has also contributed to strong 2018 performance. Significant investment across the power, water, and sewer segments is necessitated by the demands of a growing population— the Census Bu- reau projects that the population will reach ~350 million by 2030. Positive macroeconomic trends also reinforce the need for such investment to sup - port the corresponding growth in commercial and industrial sectors. The demand for utility services ( i .e., electric, natural gas, and water) has outpaced current capacity and the aging infrastructure already in place has become increasingly unreliable. Going forward, significant oppor- tunity exists for industry operators specializing in underground pipeline construction services to replace exist- ing infrastructure amidst heightened regulatory scrutiny. During 2017, in- vestor-owned utilities invested ~$50 billion in their transmission and dis- tribution networks. These utilities are in the early stages of multi-decade spending initiatives and are becom- ing increasingly reliant on third-party construction service providers due to aging utility workforces. The communication construction segment (up 5 percent year-over-year) is experiencing similar tailwinds. Deloitte estimates that $130 to $150 billion of fiber infrastructure invest- ment will be needed over the next five to seven years to "support broadband competition, rural coverage, and wire- less densification." The emergence of 5G wireless technologies marks the 2 0 1 9 F M I C O N S T R U C T I O N O U T L O O K By Nick Illuminati and Dan Shumate

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