Industrial Project Spending Indicators Up Again in August

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Researched by Industrial Info Resources (Sugar Land, Texas). Industrial project spending for the North American market is showing growth for the eighth consecutive month this year, according to Industrial Info’s Industrial Project Spending Index. The Project Spending Index is a monthly indicator that compares current year total investment value based on construction starts to the previous year, in order to get a measure of growth or contraction in the industrial market. The index takes into consideration spending details of twelve vertical markets - Power, Terminals, Oil & Gas Transmission, Oil & Gas Production, Synfuels, Petroleum Refining, Chemical Processing, Metals & Minerals, Pulp, Paper, & Wood, Food & Beverage, Industrial Manufacturing, and Pharmaceutical & Biotech. It also analyses spending by market region including monthly updates that measure the percent of change of activity between 2005 and 2006.

Project values are tallied based on scheduled construction starts. The actual expenditure of the project value will extend for the life of the project, which in the case of larger scale projects can extend 3-4 years.

Click on the image at right to see a graph showing the monthly movement of the spending index.

The attached graph shows line projection of monthly North American Industrial Project Spending index percentages. As can be seen from the graph, the index peaked in April 2006 at 33.42% growth. Declines in May and June were followed by gains in July and August. Each month in 2006 showed substantial growth when compared to analyzed project spending in 2005. This bodes well for engineers, contractors, and service providers in 2006 and into 2007 as these projects proceed through construction to commissioning.

The majority of vertical industrial market segments are up in 2006, led by Oil & Gas Production (213% growth), Synthetic Fuels (150% growth), and Metals & Minerals (84% growth). There are three industries that are currently declining in project spending: Terminals (-28%), Petroleum Refining (-41%), and Pulp, Paper, & Wood (-4.7%).

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.