Planned Spending in North America's Chemical Processing Industry for 2009 Exceeds $8 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--As the midyear point quickly approaches, many are already wondering about planned project activity for the upcoming year. The Chemical Processing Industry (CPI) in the United States and Canada has had its fair share of hurdles this year with record highs in crude oil. Financial market woes do not seem to be dragging down optimism for the upcoming year. Industrial Info is tracking an estimated $8.2 billion in CPI capital and maintenance projects planned to begin construction in 2009 in these two countries. This outlook is only slightly behind a similar comparison done for 2008 at the same time last year, when total spending for this year predicted at that time was projected at 8.6 billion dollars.

Although planned activity is down slightly in project count and total investment value (TIV), the coming year appears to have similar strength and momentum as that of 2008 with nearly 30 projects already identified for kick-off in 2009 with a TIV of $50 million or more. In the United States, the expected geography of spending is expected to change with the Great Lakes region seeing the largest reduction in overall spending at less than $200 million based on projects identified so far. CPI producers in the Great Lakes region are dealing with the poor health and uncertainty of the automotive market and related industry.

The Southwest and Southeast regions will once again be the clear leaders, representing almost one-third of all project spending for the year in the United States. Even as the price of crude oil and other energy feedstock continues to rise, the demand for energy commodities is one of the primary drivers of southern economies, which are rich in the petrochemical and refining industries. In most cases, production rates don't keep up with demand.

So far, the project activity identified in Canada for 2009 is well behind the pace of projected spending for previous years at only $242 million so far. The western provinces of Canada have provided largely to the success of Canada in recent years, although the country is still a couple of years from benefiting from oil sands development currently taking place in Alberta. A severe shortage in labor is making for a long, hard road for the development of these resources; however, the entire country could feel the benefits once these resources are exploited. In the coming year, more than half of the total project spending identified for Canada will take place in Ontario. Several major ethylene turnarounds and olefin-related projects are planned to take place next year, providing significant opportunities in the region.

It's still early and more projects are certain to be identified, delayed or canceled as the election year unfolds, as politics has an immense effect on spending forecasts and business planning.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.