January 19, 2007
The following information summarizes the construction plans in various industries and regions. It was gleaned from recent reports by Industrial Info Resources (www.industrialinfo.com), based in Sugar Land, TX.
Manufacturing - 2006 was a good year for the industrial manufacturing industry, with some 300 plants becoming operational. A sneak peak ahead at the first quarter of 2007 shows that the industrial manufacturing industry is currently expecting an additional 129 plants to become operational during that quarter alone, 43% of 2006’s year-end totals. Signs point to a very good year in terms of plants moving from the construction stage to becoming operational within the industry. Despite slowdowns in the automotive industry and the always cyclical semiconductors & computers industry, 2007 has the potential to be the best year in recent memory for new plants and additional jobs within the United States. Hopefully, this current pace will hold throughout the year.
Alternative Fuels - The alternative fuels industry leads all other industries for planned first quarter 2007 project spending with almost $1.4 billion in construction starts in Illinois and Missouri. The nine grassroots ethanol and biodiesel projects scheduled to begin construction during the first quarter account for 35% of the planned project spending in Illinois and Missouri during the first quarter. All in all, there are 98 industrial capital and maintenance projects currently scheduled to begin construction during the first quarter of 2007 in Illinois and Missouri. These projects represent just under $4 billion in spending.
Cement Manufacturing - In the U.S., there are currently 65 active projects at cement manufacturing plants totaling more than $1.8 billion, which began construction in 2006. Projects range from grassroot plant construction to new import terminals to major maintenance shutdown work. For 2007, Industrial Info is tracking 125 projects totaling $2.7 billion scheduled to begin construction. In 2006, cement sector project activity was highest in the Southeast and West Coast regions.
Metals & Minerals - Since the beginning of 2006, Industrial Info has reported more than 1,300 unique projects worldwide for the metals & minerals industry, with a combined total investment value (TIV) representing $151 billion. That’s a 69% increase in project spending when compared to the $89 billion reported in 2005 from almost the same number of projects. That means that the average per project TIV has increased significantly from $68 million per project in 2005 to $116 million per project in 2006. This increase can be attributed to strong demand and prices for metals and minerals in general, and has led to a banner year for equipment and service providers, as more and more of these larger projects are being approved and moving to the implementation stage. This bodes well for 2007, as the majority of these projects have targeted construction starts in 2007. North America accounts for $53 billion, or about a third of the project spending, while the rest of the world accounts for the remaining two-thirds of the spending.
Power Industry - Industrial Info is forecasting $49 billion in North American power industry capital and maintenance project spending for 2007. This translates into an 11% increase in spending for the power industry in 2007 when compared to 2006. Power plant developers are evaluating more than 272,000 megawatts (MW) of new power generation unit additions in the U.S. This set of more than 1,700 units takes into consideration only active, precommissioned units. The majority of these projects, about 87%, are scheduled to begin construction by 2012.
- This industry currently expects 80 new facilities to complete
construction over the next 12 months. The new sites represent a whopping $3.7
billion total investment value (TIV). Projects include the construction of
manufacturing plants, research laboratories and drug distribution centers.
Activity for 2007 represents a 30% increase over the 62 plants estimated to
have been completed in 2006. Cities and towns from across both the United States and Canada seek to land these projects.
The Mid-Atlantic region currently lays claim to the largest number of new
sites, with 11 plants expected to be finished next year.
Lakes - The Great Lakes region
is winding down one of its most successful years in terms of capital and
maintenance spending. When the clock strikes midnight on Dec. 31, the region
will have begun construction on over $27.8 billion worth of work in the form of
1,166 projects since Jan. 1, 2006. Currently, Industrial Info Resources is
tracking almost 300 projects worth just over $7.6 billion that are expected to
begin construction during the first quarter in the region, an increase of 44%
over the same period in 2006. Overall spending figures will likely increase
exponentially as the prime construction period opens in the spring and
continues into the fall.
- As one of the top five states in the United States for industrial project
spending in 2006, Pennsylvania is forecast to retain its top ranking for
industrial project development in 2007 and beyond. Companies are planning more
than $18 billion worth of industrial project spending in the state of Pennsylvania. This
includes 291 capital and maintenance projects with future planned construction
starts. Projects range from multi-billion dollar rail and IGCC power plant
construction projects to scheduled major maintenance shutdown and turnaround
- Industrial Info is tracking more than $41 billion in planned capital and
maintenance projects scheduled to begin construction in 2007 in Louisiana and
Texas. Of the total spending, 62.5% will occur in Texas
from 430 projects, while the remaining 37.5% is scheduled for Louisiana. Energy-related projects will
dominate 2007 project spending, mainly due to a large number of projects to
expand coal-fired generation and natural gas distribution on the Louisiana and Texas
coast. On the books for Louisiana is the
massive $5 billion coal gasification plant being developed by Synfuel Inc. (Baton Rouge). If built,
the project would provide a much-needed economic boost for the Louisiana Gulf Coast
region. Construction is expected to begin in March 2007 on a grassroots natural
gas processing plant for Enbridge Energy Partners LP (Houston). The plant will
be constructed in Leon County, TX, and is part of a larger $530 million East
Texas Pipeline Expansion Project, which will see a new natural gas pipeline
constructed from Orange County, TX to Bethel, TX.
- To date, over 600 capital projects in the planning and engineering
stages are tied to $60.7 billion in expenditures across the five-state region
including Alabama, Florida, Georgia, Mississippi, and Tennessee. Project expenditures are geared towards
building new plants and electrical generating units, upgrades and rebuilds at
plants currently in operation and expansions. Project owners anticipate
starting construction on 428 projects from January until the end of 2007 and
188 starting in 2008.
Processing - Capital and maintenance spending for the chemical
processing industry (CPI) located in the Gulf Coast region is expected to
increase in 2007, marking several years of steady growth. Industrial Info is
currently tracking over 174 individual projects valued at over $2.3 billion
planned to begin construction next year in the coastal areas of Alabama, Florida, Louisiana, Mississippi
These areas are of particular importance to the CPI as they have historically
contributed the largest portion of the total spending when looking at the industry
as a whole. Demand for petrochemicals, olefins, plastics and resins remains
strong, adding to the strength of the region where the largest percentage of
these products are produced in the U.S.