Industrial Hot Spots
The following information was gleaned from recent reports by Industrial Info Resources (www.industrialinfo.com), based in Sugar Land, TX. From the beginning of 2006 through the end of 2008, there are 199 manufacturing plants in North America, mainly automotive-related facilities, that are expected to close their doors. Job losses are pegged at 79,000. During the same period, however, there are 742 plants scheduled to open, adding approximately 155,000 jobs. Overall spending for the Power Industry continues to show signs of growth in 2006 over last year. Spending in the industry experienced a brief downturn that began in 2002, but the trend seems to have been short-lived as the Power Industry has shown growth in maintenance and capital spending over the past two years. Currently, Industrial Info Resources is tracking 1,026 active projects valued at over $59 billion that still have 2006 earmarked for construction kick off. This represents a 36% increase over the same period in 2005, when there were 858 projects and over $43 billion that were still active for a 2005 kick off. Proposed spending in the Oil & Gas sector is expected to reach $6.3 billion for projects beginning construction in 2007. The capital spending will be focused on the production, transportation and storage of crude oil, refined products, natural gas and natural gas liquids (NGLs). A total of 41 major projects are being tracked with an average capital value of $154.8 million. Most of the proposed projects are scheduled to begin construction between April and August of 2007, with the majority of new construction activity beginning in June 2007. The construction activity will be focused in the states of Arizona, Colorado, Montana, New Mexico, Utah and Wyoming. Traditionally, maintenance shutdowns or turnarounds within the Industrial Manufacturing Industry occur during two distinct time periods annually within the 12,000 plus plants that make up the backbone of the industry. Plants typically take down their operations in July and in December, two months that have major holidays that make it convenient for facilities to shutdown for a period of time and perform routine maintenance work that is necessary to keep the plants running. A look ahead at the maintenance work currently planned for the fourth quarter of 2006 within the industry shows a 25% decline in overall spending when compared to 2005. This decline in maintenance spending for the winter of 2006 can be laid squarely at the feet of the flailing American automotive industry. Approximately $3.4 billion in capital spending is proposed for the pipeline sector in Louisiana, representing 28 projects. The proposed projects have construction start up dates ranging from August 2006 to December 2008. The projects cover the natural gas transmission sector as well as crude oil and refined products pipelines. The majority of the projects are designed to move natural gas from the developing production fields in East Texas into Louisiana to make interconnections with interstate natural gas main trunk lines. The second largest group of projects are being proposed to export natural gas from several LNG terminals that are both in the planning and construction phases. The highest concentration of construction start ups will take place between April and June of 2008 and will represent over $700 million in planned spending. The Chemical Processing Industry (CPI) continues to perform strongly despite world events and the shifting cost of feedstock. Over $2.6 billion in planned project activity is scheduled to begin construction next year. This activity is comprised of 64 capital and maintenance projects at over 60 plant sites in the United States and Canada. Approximately $20.7 billion will be spent on construction projects beginning construction in Western Canada in 2007. The capital outlays will go into the energy sector, consisting of oil & gas transmission, storage & production, as well as refineries and some oil sands related mining projects. The total capital outlay will be spread across 60 projects slated for a construction start up between January and December of 2007. Projected capital spending for the pipeline sector in Western Canada soars to approximately $38.4 billion. The proposed capital spending being tracked by Industrial Info is spread over 67 projects spanning natural gas, condensate, diluted bitumen, crude and synthetic crude pipelines. Alberta has the highest amount of proposed spending with $12.678 billion being planned. British Columbia is in a close second with $12.223 billion in proposed spending. The Northwest Territories and the Yukon Territory have proposed project spending of $7.420 billion and $6.135 billion, respectively. Industrial companies in the greater Philadelphia area are planning more than $8.4 billion in new project construction scheduled to begin in 2006 or beyond. The top four counties in the Philly area for future industrial spending are Berks County, PA, with 17 projects totaling more than $2 billion; Chester County, PA, with 16 projects totaling $1.3 billion; Gloucester County, NJ, with 28 projects totaling $1.2 billion; and Philadelphia County, PA, with 34 projects totaling $1.8 billion. Energy-related projects equaling $2.7 billion account for 32% of the planned future projects. There are currently 28 new plants under development in the Rocky Mountain region that are planned to begin construction this fall. All of the region's seven states - Arizona, Colorado, Idaho, Nevada, New Mexico, Utah and Wyoming - will be home to new plants that are beginning construction between September and December 2006. These plants will require an investment of more than $1 billion to bring them into operation.
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