Welcome to the new year! This year has been a real challenge for many industries and many people. Yet some industries have done exceptionally well during the downturn. Now as we look to the new year, we can see some new patterns for industry as a whole.
Offshore oil and gas exploration is moving increasingly into deep water and low capacity fields that are not affordable for rigs or platforms. This market was hit by numerous cancelations and project slow downs during 2009. In 2010 this market should stabilize and continue to grow at a reasonable rate. Key sectors will be FPSO technologies and Subsea survey, development and technology. Rigs and platforms will still experience steady growth for the next few years as more developing nations in Asia and Africa look to developing their near-shore oil reserves. As the energy market becomes more diverse, we may see a general slowing of the growth of new field developments, but the industry should remain strong and continue to grow for the next ten years at least as many of the alternatives to petroleum are still not cost competitive.
Manufacturing of mass commodities - consumer electronics, semiconductors and related projects are moving into China and India at an excellerated rate. Countries like Indonesia, Thailand and Vietnam have developed sufficiently that they are not as cost-competitive with China. China leads the outsourcing of mass-production activities but 2010 may see increasing pressure on China to revalue their currency and move into developed nation status. There are also scattered concerns that China's economy may be growing too fast, and may soon suffer it's own bubble.
Chemicals and Refineries are caught in the middle. With crude oil prices low and a general lowering of demand for petroleum as alternative sources are developed. However, this is likely temporary. The price for oil has steadily increased since 3rd quarter 2009, and should continue to do so into 2010. Demand for other petroleum products is slow due to the drop in overall demand. The big question for 2010 is will consumer-confidence in the USA and Europe recover enough to boost demand for consumer goods again. The initial outlook from the USA is not good; people continue to loose jobs at a worrying rate. Chemical industries are expected to be stuck with the same over-capacity problems they have had the past few years. This may only be made worse with numerous chemical plants opening in Middle East.
Into 2010 companies that provide repair, maintenance, overhall, upgrading or other types of life-extension services to the manufacturing, oil and gas and chemicals industries should continue to do well. A lot of plants have come online during the last 5 years and they need to be maintained.
Over all the market outlook is good, but a full recovery may take longer than we hope. Maybe this is for the better. A careful recovery is better than another crash.
