Average Project Investment Value for North American Chemical Projects Increases Slightly in 2008

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Researched by Industrial Info Resources (Sugar Land, Texas)--The average total investment value (TIV) for projects planned this year in North America's Chemical Processing Industry (CPI) is $11.9 million, up slightly from earlier this year when it was reported to be $10.8 million. This increase is small, although significant when considering the level of market volatility seen so far this year and the uncertainties that cloud the long-term outlook. Even as we have experienced record energy costs in domestic markets and suffered from credit market woes, the North American CPI seems to be holding its momentum as the year continues forward.

This increase is partly due to a large number of major projects that have been identified or reported since the year began. There are more than 20 projects individually valued at greater then $100 million each with plans of beginning construction sometime during 2008 when reported. These major projects positively influence a countless number of small downstream projects, adding to the overall confidence and momentum of the industry.

The increase is also partly a result of fewer project cancellations identified as part of Industrial Info's North American Project Database with just 86 projects canceled or placed on indefinite hold so far this year. We are reminded almost daily of how the general economy has slowed or is still slowing yet one of the biggest obstacles in getting a major project to the market is a shortage in skilled labor, not a shortage of demand for consumer products.

Globally, demand for chemicals and their derivatives are huge, and the opportunity for domestic producers to satisfy that demand is now. Grassroot plant start-ups across North America will reach $800 million or more by year's end, and the appetite for more grassroot construction appears just as strong for next year with more than $900 million in grassroot start-ups already identified for 2009.

It is still too early to predict what will happen next year, although based on active projects currently identified for construction in 2009, the average TIV stands at $18 million for CPI projects. Traditionally, that number decreases and becomes more realistic as a new year approaches, when there's a better view of which projects will be delayed or shelved .

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.