There are growing pressures on the welding industry that will make business interesting, if not downright difficult.

To start, prices can be counted on rising continuously, and that includes prices for metals and prices for gases.

The increase in metals prices will affect base and filler metals, and for welding wire and other consumables. The prices for wire and consumables already are on the rise, primarily because the price for copper nearly doubled late in 2007 in less than a month. There are predictions that prices for copper will decline over the next two years, but for the time being, copper pricing can be expected to keep prices pushing upward for the brass used in consumables.

In part, as a result of those high prices, contractors and engineers are looking for ways to reduce their uses of copper pipe and welding processes.

David J. Nangle, president and chief executive officer of the Harris Products Group of The Lincoln Electric Co., said recently that he has seen a shift to plastic pipe – as a replacement for copper and copper brazing – in construction. Nangle spoke at the recent meeting of the Welding Equipment Manufacturers Committee of the American Welding Society.

In addition, Dan Taylor, vice president for welding for Norco, the Boise, Idaho-based gases and welding products distributor, said his company has seen some encroachment on welding processes by adhesives. Taylor also spoke at the recent WEMCO meeting.

Combined with the rising prices for gases, especially for helium, which appears to be on an increase with no end in sight, we can expect that the costs of welding will continue to rise through this year.

As if that that isn’t enough, the worst of the pressure – on welding and on other industries – is the talk in the air about a recession that is expected to arrive at any minute. The fiasco in subprime lending that has shocked the housing market is not going to dissolve soon, oil prices are going to stay high, and predictions in most local media is that we are standing on the brink of a serious economic calamity.

On the other hand, Economist Alan Beaulieu, a principal with the Institute for Trend Research (www.ecotrends.org) also spoke at the WEMCO meeting, and he said he does not expect the U.S. economy to fall into a recession until 2009. Beaulieu, who I’ve seen being more right than wrong in his predictions and analysis, said he expects the U.S. economy to grow 1.8 percent to 2.4 percent in 2008, but then to spiral into a hard landing in 2009 and 2010, before starting to recover.

Presuming Beaulieu’s prediction will be on target, though, business will continue to operate under an increasingly dark cloud in 2008, but it will be a time to put your shop in order.

“A perfect economic storm is coming down on the United States, and the best that we can do is to batten down the hatches,” Beaulieu said, pointing out that we have just a few months left to do that.

He offered three things to do to prepare for the blow:

• Clean up your balance sheet. Reduce debt and free cash.
• Prepare for the time when you’ll have to lay people off.
• And, decide what products and services your company could offer that would be countercyclical, that would provide some business to cushion the economic downturn.

Nangle nicely summed up the implication of Beaulieu’s third suggestion, saying: “Companies that aren’t diversified will be affected more than companies that are.”

All together, Beaulieu’s ideas for preparing for an economic downturn and Nangle’s observation are good, even in good times. And, they can give you some shelter as you prepare for the coming economic storm.