Refining and Alternative Fuels Industries Dominate Indiana's Third-Quarter Project Spending

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Researched by Industrial Info Resources (Sugar Land, Texas)--Spending in Indiana continues to remain solid coming into the third quarter of 2008. During the second quarter, just under $7 billion worth of capital and maintenance projects began construction. The scheduled spending for the upcoming quarter shows that an additional $5.5 billion in construction activity is expected to begin in July, August and September.

The Refining and Alternative Fuels industries account for 83% of the total amount expected to be spent on construction during the third quarter. In the Refining Industry, five projects at BP's (NYSE:BP) (London) refinery in Whiting, Indiana, account for $2.9 billion in construction. These projects, all part of a $3 billion sour Canadian crude project, will enable the refinery to process 85% of Canadian sour crude oil.

In the Alternative Fuels Industry, nine projects worth about $1.6 billion are expected to begin construction in the third quarter. Of those projects, eight are grassroot fuel-ethanol plants that will produce 700 million gallons of ethanol per year. The ninth project is the first two phases of a grassroot biodiesel plant that will produce 120 million gallons per year after it is fully operational.

The balance of the project work for the quarter is spread out among the Power, Pharmaceuticals & Biotech, Metals & Minerals, Industrial Manufacturing, Food & Beverage and Chemical Processing industries. The projects include:

•Metals & Minerals: $275 million continuous steel annealing plant addition
•Pharmaceuticals & Biotech: $150 million grassroot pharmaceutical distribution center
•Food & Beverage: $40 million grassroot refrigerated storage facility
•Chemical Processing: $1 million personal-care-products plant maintenance turnaround in the third quarter of 2008

Regardless of which industry the projects are in, spending in Indiana has remained surprisingly strong despite the downward turn in the economy and rising prices of oil and gas. The majority of the Great Lakes region is suffering dramatic decreases in overall spending because of these issues, combined with tens of thousands of job losses, primarily within the automotive industry. The fact that spending has remained somewhat stable, at least in Indiana, is a positive sign for both the state and the region.

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