Pipe-valve-fitting sector to gather in Houston on May 18
BY MORRIS R. BESCHLOSS
PVF and economic analyst emeritus
The convergence of the pipe-valve-fittings sector will reach its apex in Houston at the H.E.S.S. Club on May 18.
For the first time ever, the quarter-annual PVF Roundtable will host the governing council of the ASA’s Industrial Piping Division, which will be holding its own periodic meeting in Houston the following day. Another salient feature of this event will be the annual induction ceremony of The Wholesaler’s PVF Hall of Fame. This year’s inductee is Eastern Industrial Supplies Inc. (EISI), which has literally exploded its business in a substantial segment of the Southeast, where this multi-branch group has become a fast-growing factor in pipe-valve-fittings.
This grand gathering also presents me the opportunity of generating my analysis of current PVF trends forecast for the U.S. economy in general. This summation was aptly named “The Beschloss Moment” by PVF Roundtable president Ron Merrick.
With the general U.S. economy still regaining its footing, mid-May is a superb time to focus on current happenings, as well as the growing role of PVF in this turbulent era. It would behoove everyone in the PVF sector to notify Roundtable executive director Danny Westbrook of their intention to attend. Please visit www.PVF.org to register.
If February record attendance is any indication, look for “standing room only” to be filled in short order.
Houston University professor debunks Obama energy initiatives
Before a record, rapt audience of over 225 in Houston at the February gathering of the PVF Roundtable, economics professor Michael J. Economides debunked the Obama energy objectives as farcical.
He commented sarcastically on the President’s call for a return to nuclear development, which his Administration had recently rejected along with coal, oil and even natural gas in favor of solar, wind and geothermal power. This is despite the fact that overwhelming evidence shows those Administration-rejected resources provide 87% of needs for transportation, power generation, and an increasing amount of derivatives, such as plastics and chemicals. Economides noted this proportion won’t change in the next 50 years.
He stressed that China, India, Brazil and other developing nations are not professing the “fallacious global warming theories” propounded by Western Europe and the current U.S. Administration. In fact, he feared such predisposition will indenture the U.S. even further into dependence on foreign oil, and castigated the Environmental Protection Agency for its arbitrary antagonism toward fossil fuels, and hydrocarbons generally.
With the breakthrough of shale fracking for natural gas, due to the unlimited availability of this resource in the U.S. and Canada, Economides called for a much greater exploitation of this resource for power generation, as well as eventual conversion for transportation usage, if an infrastructure for that resource can eventually be built.
He also accused Russia of using oil and natural gas to reignite its imperialism over its former satellites and even Western Europe, which is heavily dependent on Russia for fossil fuels. Russia, in turn, is totally dependent on these natural resources for its financial liquidity.
Economides’ prediction for the price per barrel of oil for 2010, which is now near $80, will be close to $100. He also cautioned that any outbreak of hostilities with Iran could double that price, if and when such an altercation takes place.
Small business sector continues paring inventories as jobless claims stagnate
Most recent statistics validate the conclusion that the bulk of America’s small business sector, which employs 65% of the overall U.S. worker potential, is still reducing its inventory positions despite an upward thrust in sales throughout most sectors in December. This is supported by an inventory to sales ratio of 1.12, well below December 2008’s 1.32, and even last November’s 1.14. A ratio of 1.12, for instance, means that it would take 1.12 months to clear the shelves of existing inventory.
This is the lowest point reached since mid-year 2008, when the worldwide business boom had reached the highest point in recent history. Much of the continued inventory shrinkage has been driven by the fear of illiquidity, as small businesses continue to face concerns with credit availability and slow demand growth.
Despite the more propitious outlook in stemming the Obama Administration’s perceived anti-business initiatives, business in general continues to concentrate on maximum productivity. Generally speaking, based on my continued communications contacts, the industrial manufacturing and distribution sectors are becoming more incensed at the growth of the national debt and the runaway deficit, with little to show for it.
The historical evidences of expanded demand, job creation and innovative opportunities are conspicuous by their absence. “The lack of understanding by the Federal Government as to what makes business tick has taken its expenditures into areas of non-productivity,” according to many influential business decision makers.
At this stage, it looks as if demand must first assert itself before the productive sectors will extend risk capital for future growth.
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Morris R. Beschloss, a 54-year veteran of the pipe, valve and fitting industry, is PVF and economic analyst emeritus for The Wholesaler.