Industrial Hotspots: Slight Decline Seen For 2007 Industrial Spending
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, www.industrialinfo.com: