Joint IPD, PVF Roundtable, PVF Hall of Fame to celebrate unified festivity
BY MORRIS R. BESCHLOSS
PVF and economic analyst emeritus
It seems only yesterday that I had the privilege to join three industrial pipe-valve-fitting leaders in New York City to help form ASA’s Industrial Piping Division. It’s hard to believe that this happened 40 years ago, in 1970. The distribution titans were Fred Keenan of Keenan Pipe, George Keenen from Keenen-Cashman, and Charles Ransburg of Pittsburgh Gage, who joined in laying the groundwork of the newly-formed ASA’s Industrial Piping Division.
ASA had simultaneously been formed from the merger of the Central Supply Association and the American Institute of Supply Association. My role of being part of this August group came from my chairmanship/presidency of the Valve Manufacturers Association at that time. Prior to this union, there had not been a formal organization of wholesalers who had primarily focused on pipe-valve-fittings, but were also involved with plumbing-heating-cooling products.
Fast forward to 1987, when energy industry entrepreneur Sidney Westbrook brainstormed the idea of a vertical PVF organization that included manufacturers, distributors, industrial end users, OEMs, specifiers, turnkey constructors and others associated with this fast-growing sector. The resulting PVF Round-table now meets in concert four times a year.
Although I am honored to be a director emeritus of this group, and provide a 15-minute analysis of the economy at each meeting, the greatest benefit in being active in this quarter-annual get-together at the H.E.S.S. club in Houston is the unparalleled networking that is available at these functions. Although such outstanding speakers as Professor Michael Economides of Houston University and the editor of the Oil & Gas Journal have represented the high caliber of speakers, the one and a half hours of “mixing it up” with some of the PVF sectors movers and shakers makes attendance especially worthwhile.
The recent meetings have established attendance records, and have been getting rave reviews. But what makes this year’s meeting on Tuesday, May 18, so special are the conjunction of the Industrial Piping Division, the host PVF Roundtable, and the ninth consecutive induction celebration of the PVF Hall of Fame.
This highly touted honors organization was a brainchild that I presented to Tom Brown, owner of TMB Publishing Company, when I joined his organization in May 2001. With a combination of PVF industry founders, including manufacturers and wholesalers entering the Hall of Fame, it’s been a matter of great pride to me that the leading lights of this industry are today’s shakers and movers who have come together under a common banner of legendary performance. They are truly qualified to keep alive the shining example of their forebears and their subsequent successors.
Although only 40 members have been inducted so far in eight years, future inductions will be limited to a single candidate per annum.
The IPD, which will be holding their periodic meeting in Houston the next day, have also begun to pick their outstanding member of the year. In 2008 in Atlanta, Tim Arenberg of Columbia Pipe received the initial honor, with Gary Cartright, Piping & Equipment, being granted the award last year in Washington, D.C.
A further honor was bestowed on the pipe-valve-fitting sector when Affiliated Distributors established a separate division for this fast-growing group in the late 1990s. According to latest estimates, this plumbing-heating-cooling-piping segment represents in excess of $25 billion, almost a third of revenues generated by wholesale distribution nationwide. With power generation, fossil fuel production and renewable energy development destined to grow dramatically in the decades ahead, PVF is a sure bet to expand today’s already voluminous activities.
With this combined stellar celebration coming up imminently at Houston’s H.E.S.S Club on May 18, 4:30 p.m. You can’t afford to miss this great event presentation of PVF industry highlights. Please go to www.pvf.org and indicate your attendance.
U.S. trade deficit narrows significantly
With just about every financial aspect of America’s world-leading global economy generating widening deficits or target shortfalls, the U.S. trade deficits seem well-behaved by comparison.
Based on a percentage of America’s $14.3-trillion gross domestic product, the latest current account deficit of 3.2%, the quarter annual analysis of all imports/ exports of goods and services was down to $115.6 billion in the final 2009 three-month period. During the heady economic growth of 2005-6, this gap had reached double the current percentage deficit at 6.5%.
Although this may be trumpeted as an economic achievement in certain quarters, it’s really a reflection of a substantially shrinking import volume and price reduction, while lagging exports were able to hold their ground more effectively.
Obviously, the Great Recession engendered a dramatic reduction of imports, including oil derivatives, which still make up about 20% of the revenues expended for incoming goods. Since Americans’ highway travel remains severely curtailed, it’s not expected that this statistic will change much as the economy recovers this year. However, continued dependence on foreign oil could increase this major portion of the trade gap, as oil prices climb back toward the $100-per-barrel price. The more severe restrictions placed on domestic offshore drilling make “energy independence” a distant dream, unlikely to be fulfilled in the indeterminate future.
But a greater emphasis on American-made products, supported by the $800-billion stimulus, will likely deter a major return to offshore goods expenditures any time soon.
With annual government outlays reaching increasingly voluminous record amounts, trade deficit improvement will make little impact on the unprecedented and growing deficits now being experienced by the U.S. overall economy.
U.S. mfg future increasingly in doubt
Despite a greater emphasis on high and bio-technology, and the attempts of focusing more aggressively on products primarily manufactured in the U.S., the latest manufacturing capacity utilization figures emphasize the extent to which existing production facilities have contracted. Following capacity utilization running in the low 80s percentile for the preceding three year period (2005-6-7), the manufacturing, mine and utilities sector hit an air pocket in early 2008, which reached a multi-decade low of 68.3% in June 2009.
Much of this was due to the near collapse of the automotive sector, abetted by the thousands of component providers that fell in tandem with the major car and truck manufacturers that they supplied.
Renewable energy, and a significant increase in technological upgrading for both back office and shop floor will do little to utilize much of the existent excessive capacity, not to mention the absorption of the current large number of unemployed. Almost all capital expenditures are targeted at making businesses more efficient by reducing labor costs and lessening the need for additional employees.
As previously mentioned, the current Administration is focusing on government employment, climate control and forced unionization, instead of national infrastructure development, oil and natural gas drilling, and expanding the utilization of American-made fabricated products to utilize the facilities now in existence. This lack of industrialization also puts a crimp in export potential, since two-thirds of this potentially leading U.S. economic sector is made up of industrial products.
Continued avoidance of broadening the base of U.S.-made manufactured products by the current Administration will neither utilize existing facilities nor lead to expansion investment.
It’s a given that the absorption of those seeking employment, now estimated at over 17% of a potential 155 million strong workforce, will be left stranded on unemployment payments, or ‘make work’ government jobs.
To get the financial and economic news on my daily blog, please log on to www.theworldreport.org, then click the link to “Morrie’s Page” at mydesert.com. Please recommend the blog if you find it informative.
Morris R. Beschloss, a 54-year veteran of the pipe, valve and fitting industry, is PVF and economic analyst emeritus for The Wholesaler.