Industrial Hotspots: Grassroots U.S. Industrial Plant Construction Increases 33% in 2007
May 1, 2007
Since a similar study was conducted in October 2006, the number of grassroots industrial plants under construction in the U.S. has increased from 601 to 656, while total investment value (TIV) has increased by about 33%, from $60 billion to $88 billion, according to Industrial Info Resources (www.industrialinfo.com).
Grassroots plants are defined as plants that are being constructed from the ground up, with no previous site improvements. Plants under construction include projects that have achieved financing, board approval and have broken ground or begun civil/site preparation activities.
Here are some of the nation’s “hotspots” of note, broken down by industrial category or region.
Industrial Manufacturing: After a slow start to the year - only $10.2 billion in construction starts - the industrial manufacturing industry will ramp up spending as the prime construction period begins during the second quarter of the year. At last report, Industrial Info was tracking $15.6 billion worth of projects scheduled to begin construction in April, May and June in the U.S., approximately $3 billion less then the same period in 2006. The top five spending states during the second quarter are New York with $4 billion, California at $1.9 billion, Texas at $1.6 billion, Georgia at $1.5 billion and Tennessee with $1.1 billion. While spending is down from a year ago, the second quarter is still expected to post some significant investment numbers across the country.
Chemical Processing Turnaround: Maintenance turnaround spending for the U.S. and Canadian chemical processing industry (CPI) remained steady during the first quarter of 2007, with a small increase in the total number of turnarounds over the same period of last year. Industrial Info reported 37 planned CPI maintenance turnarounds for the first quarter of this year, which is a total investment of $86 million. This is a 16% increase in project activity despite a slight decrease in overall spending. The majority of the first quarter maintenance turnarounds took place in the petrochemical rich states of Texas and Louisiana, totaling 19 individual plant turnarounds at a cost of $57 million. Maintenance turnaround activity is expected to continue strengthening in the second quarter, with nearly 100 planned turnarounds kicking off. This is an increase of nearly 10% over the second quarter of last year. Turnaround activity generally peaks twice each year, once in the spring and again in the fall.
Pharma-Biotech: The Pharmaceutical-Biotech Industry expects 135 capital and MRO (maintenance) projects carrying a total investment value (TIV) of $4.3 billion to begin construction during the second quarter of 2007. This project activity represents a slight increase of roughly $200 million in TIV, or 5%, over the second quarter in 2006.
Ohio: Ohio has more than $7 billion in industrial projects, which have either started construction or are scheduled to start construction during 2007. Industrial Info has identified 240 capital and maintenance projects across 12 industries in the state.
Great Lakes Region: Always a hotbed for plant activity, the Great Lakes region is once again poised to have a very solid quarter in terms of new industrial plant openings. During the spring and summer, almost 60 new plants are currently scheduled to open their doors in the Great Lakes region of the country. The plants that will open in the coming quarter cover the gamut of manufacturing, ranging from ethanol production plants to plastic bottle plants to wind farms to automotive tier suppliers to dairy farms to distribution centers.
Rocky Mountain Region: This region has $26 billion in capital projects forecast to start construction in 2007. With 95 projects already underway or planning to start in the first quarter, the region experienced a 36% increase in the number of projects beginning construction this year and a massive 52% increase in investment spending costs over last year’s $1.9 billion. The region includes Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming, and consists of 2,205 operational industrial plants.
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