Although slowed investment activity during the recession cooled demand for industry's services, pursuit of natural gas has kept business flowing over the past five years. Looking forward, the industry is projected to experience a strong recovery.
From 2012, IBISWorld forecasts that continued investment in unconventional domestic energy sources (gas shale and oil sands), pressure to repair and replace aging infrastructure and recovery in the residential construction markets will support industry performance. For these reasons, industry research firm IBISWorld has added a report on the Oil & Gas Pipeline Construction industry to its growing industry report collection.
Los Angeles, CA (March 7, 2012) -- Pipelines are essential for transporting vital fuel supplies to households and businesses. In the mid-to-late 2000s, the aftermath of global energy price hikes and the opening of natural gas fields led to extraordinary growth of investment in domestic energy resource developments, underpinning demand for pipeline and related infrastructure construction. Over the five years to 2012, revenue for the Oil and Gas Pipeline Construction industry is expected to grow at an average annual rate of 3.3%, exceeding the subdued pace of GDP growth (0.6% per year).
A surge of investment into natural gas and oil infrastructure construction has driven the energy pipeline market. Hikes in energy prices and advancements in extraction technologies created a significant increase in domestic oil and natural gas production. According to IBISWorld industry analyst Kathleen Ripley, “This higher production also boosted demand for pipeline construction to facilitate connections to existing infrastructure and markets.” The recession cooled demand for energy infrastructure development from 2009 to 2011, as energy prices slumped and financing became more difficult. The moratorium on deep-sea drilling in the aftermath of the 2010 Deepwater Horizon spill in the Gulf of Mexico – the worst in US history – deferred oil and natural gas pipeline developments in the region and hampered the industry's performance over the past two years. During 2012, IBISWorld estimates that the Oil and Gas Pipeline Construction industry's revenue will increase as global energy demand boosts domestic investment in energy infrastructure.
The industry has a low level of concentration, with the largest players – Bechtel Corporation, Fluor Corporation and Jacobs Engineering Group Inc. – accounting for a relatively small percentage of revenue. However, says Ripley, “The industry is more concentrated than many in the construction sector.” Looking forward, the industry is projected to experience a strong recovery. From 2012 onward, IBISWorld forecasts that continued investment in unconventional domestic energy sources (gas shale and oil sands) – along with pressure to repair, replace and expand existing infrastructure and recovery in the residential construction markets – will support industry performance. For more information, visit IBISWorld’s Oil and Gas Pipeline Construction report in the US industry page.
IBISWorld industry Report Key Topics
This industry comprises contractors who are responsible for the construction of gas and oil pipelines, mains, pumping stations, refineries and storage tanks (i.e. new work, reconstruction and repairs). It also includes construction management firms and special trade contractors that are primarily involved in oil and pipeline construction.
- Industry Performance
- Executive Summary
- Key External Drivers
- Current Performance
- Industry Outlook
- Industry Life Cycle
- Products & Markets
- Supply Chain
- Products & Services
- Major Markets
- Globalization & Trade
- Business Locations
- Competitive Landscape
- Market Share Concentration
- Key Success Factors
- Cost Structure Benchmarks
- Barriers to Entry
- Major Companies
- Operating Conditions
- Capital Intensity
- Key Statistics
- Industry Data
- Annual Change
- Key Ratios
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