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Three Trends Impacting Oil & Gas Machinery Manufacturers

Posted by IndustrySelect on Wednesday, January 29, 2020

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2 MIN. READ

Anticipating how U.S. manufacturing industries will evolve in the coming years is often challenging, and the oil and gas field machinery manufacturing industry is no exception.

For salespeople and marketers, understanding the trends that will define the industry in 2020 is important, and precisely what we're covering today.

Read on to discover three trends that will dominate oil and gas machinery manufacturing in the coming year(s).

The U.S. South Owns Most of the U.S. Market

In recent years, the U.S. South has dominated headlines when it comes to the establishment of new manufacturing operations and expansions. The oil & gas industry is a vital part of this trend. According to data captured by MNI, 80% of oil and gas field machinery manufacturers are located in the South, with most located in the state of Texas.

This is in direct contrast to U.S. manufacturing as a whole, in which nearly a third of all manufacturers are located in the Midwest, according to MNI, compiler of the industrial data that powers IndustrySelect. The South captures 29% of U.S. manufacturing overall.

Look for continued manufacturing growth in the U.S. South, including growth in oil & gas machinery manufacturing. 

The Industry Has Suffered From an Overall Downturn in U.S. Manufacturing

Despite the success of manufacturing in the South, the oil and gas field machinery manufacturing industry at large hasn't escaped the overall downtrend of U.S. manufacturing.

There are plenty of factors at play here. U.S. manufacturers must contend with surging competition - particularly from Asian countries such as China. These countries have fewer worker protections and lower corporate taxes than the U.S., making them ideal settings for cheap manufacturing.

Additionally, U.S. manufacturing is currently suffering from a lack of skilled workers, with 89% of manufacturers agreeing there is a shortage of skilled workers in U.S. manufacturing.  Finally, policy decisions from the current administration, including tariffs on standard materials such as steel have immpacted supply chains.

As a result of these negative attributes, data from MNI indicated the oil and gas field machinery manufacturing industry saw a -0.36% downturn in jobs from previous years.

Manufacturers will Turn to Technological Innovation to Thrive

There's a reason every manufacturer lists new technologies like 5G, the internet of things and automation as "areas of interest" in their mission statements. These technologies are potential solutions to many of the problems presented earlier in this article.

As a result, expect to see manufacturers pouring resources into these technologies. The high-reward, low-risk nature of technological innovations is one reason companies on the cutting edge of technology, such as Schlumberger, are some of the fastest-growing manufacturers in America right now.

Looking for Contacts in the Energy Industry?

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Reach 500,000 executive decision-makers in key energy verticals such as oil & gas machinery manufacturers, pipelines; well services; transmission & gathering, refining & gas processing; liquid terminals; drilling and well servicing; petrochemical, gas utilities & local distribution companies (LDC’s) and more.

Subscribers can select up to 30 data points on any manufacturing company in the U.S. to help identify or pre-qualify leads. Try a free demo today!

Related: Global Energy Business Database Now Available

 Article Sources:

https://www.theatlantic.com/business/archive/2012/05/the-revenge-of-the-rust-belt-how-the-midwest-got-its-groove-back/257541/
https://www.thebalance.com/u-s-manufacturing-what-it-is-statistics-and-outlook-3305575
https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-skills-gap-study.html?mod=djemRTE_h
https://reason.com/2019/12/27/trumps-trade-war-has-hurt-american-manufacturers-more-than-it-helped-them/

 

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