According to Industrial Info Resources’ (Sugar Land, TX) Project Spending Index, North America industrial project spending experienced 15.3% growth in 2006 when compared to 2005, increasing from 5,450 projects valued at $144 billion in 2005 to 5,967 projects valued at $166 billion in 2006.

Looking ahead to 2007, more than 5,400 major projects with a total investment value of $314 billion have been identified to begin construction this year in North America. Using a Confidence Factor derived from past spending performances, Industrial Info is forecasting that $136 billion in project activity will actually take place. The Confidence Factor is the percent change in total investment value from the initial forecast to the actual amount of spending that reaches fruition. In the U.S., $254 billion in activity is scheduled for construction in 2007. Based on a Confidence Factor of 43.5%, it is estimated that $110 billion in spending will actually take place in the U.S.

Eight of the 14 market regions in North America experienced industrial project spending growth in 2006, led by the New England region with 111% growth. Other regions experiencing growth in 2006 include Western Canada with 67.4% growth, Atlantic Canada with 58.7% growth, Great Lakes with 54.8% growth, and the Midwest with 35% growth.

Six North American market regions experienced negative growth in 2006 including Mexico, Quebec, West Coast, Southeast, Rocky Mountains and the Northeast.

Hudson County, NJ, has jumped to the top of the list of U.S. counties in projected industrial spending for 2007, mainly due to a $6 billion planned expansion for the Hoboken Access to the Region’s Core (ARC) expansion project, which is aimed at extending transportation access between Manhattan, NY, and New Jersey via a new rail tunnel under the Hudson River. It is possible that the project could start construction late this year. In addition to the rail project, there are several small projects and outages planned by companies like PSEG Power and International Matex Tank Terminals.

Second on the list for 2007 is Ascension Parrish, LA, with 13 projects totaling about $5.1 billion. Led by the massive $5 billion synfuel coal gasification project, Ascension Parrish, LA, also has a slew of chemical processing industry projects planned by companies such as Huntsman Corp., Shell Chemical, Williams Co. and Rubicon, to name a few.

Harris County, TX, leads the way among counties in individual projects, with some 93 industrial projects worth more than $1.6 billion scheduled to begin construction in 2007. Traditionally one of the nation’s top industrial project spending counties, due in part to a large petrochemical plant population, Harris County will experience a similar amount of expenditures in 2007 as compared to 2006, when industrial companies performed about $1.5 billion worth of major projects.

Showing up as the second most active county in the nation for industrial project activity in 2007, with 59 projects currently on the books, is Los Angeles County, CA. These projects total more than $3 billion in total investment value (TIV). Noted more for Hollywood and the Sunset Strip, Los Angeles County is often overlooked as the industrial hub of the U.S. West Coast with historic roots in oil & gas, and agriculture, as well as an international transportation and shipping hub with major ports in Los Angeles and Long Beach. The largest project scheduled to begin construction in 2007 is a $1.4 billion extension of the light rail system in Arcadia, CA.

Here are some more regional and industry snapshots of projected industrial spending reported by Industrial Info Resources,

  • Alternative fuels. President Bush’s alternative fuels initiatives outlined in this year’s State of the Union address represent a minimum of $45 billion in capital investment to get the additional capacity online by 2017.


  • Southwest Region Sparkles. The Southwest market region is outpacing the traditionally No. 1 Great Lakes region for total planned industrial project spending dollars for 2007. A recent snapshot of project spending for North America indicates that the Southwest has jumped from $45 billion to $50 billion in industrial projects scheduled to begin construction in 2007. The Great Lakes region is a close second with about $44 billion, followed by Western Canada with $33 billion, and the Northeast with $27 billion. These figures will change as the year progresses and new projects are identified and others fall out due to delays or cancellations. By far, the largest project planned to begin construction in the Southwest region in 2007 is a grassroots $5 billion coal gasification plant. Synfuel Inc. (Baton Rouge) is permitting the plant to be located in Geismar, LA.


  • Automotive. The last few years have been tumultuous for the automotive industry in North America. Plant closings, massive layoffs and bankruptcies have been the order of the day, yet at the same time capital and maintenance spending has managed to maintain a steady pace. Just over $10 billion was invested in capital and maintenance projects in North America during the course of last year, slightly down from 2005’s $11.2 billion in spending. Currently, Industrial Info Resources is tracking close to 250 active capital and maintenance projects worth over $10.5 billion that are scheduled to begin construction during 2007.


  • Texas. Industrial Info Resources is currently tracking 473 industrial projects in Texas totaling more than $27 billion and scheduled to begin construction in 2007. This is an increase from the 427 projects totaling $18 billion that were scheduled to begin construction in 2006. The dramatic increase for 2007 can be primarily attributed to the Power Industry, which is developing several large-scale coal-fired power generation unit additions in the state. The Petroleum Refining Industry is the second largest industry for Texas project spending in 2007, with 73 projects totaling $3.2 billion planned to begin construction. This represents a significant turnaround for the Refining Industry, which in 2006 saw planned project spending dip below $1 billion. The increase in 2007 is mainly due to capacity expansion projects, which are getting closer to fruition.


  • Gulf Coast. Some of the largest industrial projects that begin construction each year traditionally take place in the coastal regions of Texas, Louisiana, Alabama and Florida, commonly referred to as the Gulf Coast region of the United States. Looking ahead into 2007, more than $26 billion in total spending from about 550 projects have been identified to begin construction this year across 12 different industries. A significant portion of this activity is made up of projects that were originally planned to begin construction in a prior year.


  • Lake County, IN. Thirty-five minutes from downtown Chicago, with port access to Lake Michigan, Lake County, IN, is home to a large industrial plant population of steel manufacturers, oil refineries & terminals, and power plants. Massive expansion projects planned by BP at its refinery in Whiting, IN, have pushed Lake County into the top 10 industrial project spending counties for 2007. All in all, the industrial market is planning more than $3 billion from 23 capital and maintenance projects scheduled to kick off in 2007. The Petroleum Refining Industry accounts for about 96% of the planned projects for 2007.


  • Pharmaceutical-Biotech. The Pharmaceutical-Biotech Industry currently expects 42 capital and maintenance projects carrying a TIV of $1.66 billion to begin construction during the first quarter of 2007. This project activity demonstrates a slight increase of $60 million in TIV, or 4%, over the first quarter in 2006. The number of actual projects increased to 42 for 2007, a gain of five projects and 13.5% over last year’s numbers. Geographically, the project activity is spread throughout 26 states and one in Puerto Rico.