In the United States, natural gas consumption and production for domestic, industrial and power generation will drive industry growth. The recovery in housing investments will spur demand for the construction of additional pipeline infrastructure and distribution hubs during the next five years. Additionally, the price of natural gas is expected to increase at an average annual rate of 6.9% during the five-year period, encouraging additional investment in pipeline infrastructure. Regulatory oversight will also accelerate pipeline replacements, particularly in the Midwest and Northeast regions of the country. The increasing popularity of natural gas in the United States, augmented by a dramatic increase in shale gas production, will strongly determine industry performance for pipeline operators during the next five years.

Meanwhile, the Oil and Gas Pipeline Construction industry in Canada is more dependent on activity in downstream oil production. Alberta boasts the world’s third-largest proven oil reserves, behind Saudi Arabia and Venezuela. Canadian operators are expected to fill the infrastructure deficit in regions such as the Northwest Territories, and link oil fields in Western Canada to refineries and shipping terminals in Eastern Canada. Although demand for natural gas is quickly rising, crude oil will continue to account for the largest share of global energy consumption during the five years to 2019. Since Canada’s rich oil reserves are poised to meet this demand, pipeline operators in Canada are expected to experience more accelerated revenue growth than the United States during the five years to 2019. However, the world price of crude oil is forecast to slowly grow at an annualized 0.2% during the five-year period. This factor will temper demand from downstream oil extraction and limit even higher revenue growth for Canadian industry operators.

Conclusion
Broad trends, such as accelerating media fragmentation and burgeoning consumer markets abroad, will continue to push and pull North American industries during the next five years. However, both Canadian and US industries will continue to be shaped by context-specific factors arising from their respective countries’ unique economic, political, social and regulatory environments. Comparatively high wage costs in Canada, for example, could mean the permanent exit of certain manufacturing industries. Manufacturing operators that remain may focus on product innovation and differentiation to compete with those of their southern neighbor. In another example, greater media fragmentation will play out differently in the United States than in Canada, where the media and information sector is notoriously concentrated in the hands of a few dominant operators. Finally, the relative strength of the Canadian and US dollars during the next five years will dictate trade performance between the North American partners.

Contact:
Tyler Allen
IBISWorld Media Specialist
Email Contact
917-267-0351