Forecasting the future price of oil is tricky at best, but the long term price trend clearly seems to be upwards, giving a positive forecast and a robust outlook for composites demand in the oil patch. However, other end uses of composite pipe for civil construction and water transport are likely to see only sluggish demand until the economy strengthens and municipalities are able to fund more infrastructure projects.
A Year of Single-Digit Growth
At the close of calendar year 2011, there was still speculation on how the U.S. economic recovery will proceed into 2012. It has been an exercise in patience waiting for stronger numbers from the U.S. housing industry, various consumer segments and the jobs market. The most recent government release of estimated GDP and industrial production numbers suggest we are in for more quarters of relatively soft growth. Third quarter GDP was revised down from 2.5 percent to 2.0 percent and estimates of industrial production are 3.6 percent for the full year 2011 and a mere 1.6 percent for 2012. Given this context of low expectations in the economic data, we are likely to see another year of single-digit growth in the U.S. composites industry as well.