Bakken Shale, Surrounding Area to Experience Spike in Labor Demand

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the past few years, much of the attention in the upper Midwest has been on North Dakota and the development of the Bakken Shale. The Duluth area and northern Minnesota traditionally have been fairly modest for industrial-project spending, averaging approximately $1.57 billion annually over the past five years. However, according to Industrial Info Resources' recently prepared Craft Labor Analysis and Forecast for Minnesota and North Dakota, the region could see a sharp uptick in project activity in 2016 and 2017, driving up demand for craft labor.

Click on the image at right to see a graph detailing expected skilled craft labor demand in northern Minnesota, from 2007 to 2020.

Planned investment for industrial capital and maintenance projects in northern Minnesota is expected to more than double in 2016 and 2017, rising to $4.8 billion and $3.9 billion, respectively. The bulk of this planned spending comes from the Metals & Minerals, Pipelines and Power industries. Industrial Info is currently tracking active projects in the region valued at more than $14 billion, and more than half of this planned investment comes from the state's booming mining sector.

Among the largest of these projects is Twin Metals Minnesota's (Saint Paul, Minnesota) planned construction of a grassroot copper/nickel/PGM (platinum group metals) mine near Ely, Minnesota. The 80,000-ton-per-day mine would be accompanied by a concentrator, flotation mill and hydrometallurgical plant.

Pipelines projects contribute 32% of the region's planned investments. Enbridge Energy Partners (NYSE:EEP) (Houston, Texas) is planning substantial spending in the area. The company's massive Line 3 replacement project will replace the existing crude oil pipeline from Hardisty, Alberta, to Superior, Wisconsin, and will span Minnesota from its eastern border with North Dakota to Wisconsin. The company's Sandpiper Pipeline also will traverse the state, delivering crude from the Bakken Shale to Enbridge's terminal in Superior.

The region's $1.5 billion in planned Power Industry projects, many of which are scheduled to kick off in 2016, range from natural gas-fired repowers to environmental retrofits and windfarms. The convergence of these and other large projects is leading up to an unprecedented spike in labor demand in northern Minnesota in 2016-17.

In North Dakota, Industrial Info already is seeing "full employment" for many crafts and shortages of others, such as millwrights, iron workers and pipefitters. This is set become more acute across the upper Midwest as project activity escalates. The Bakken Shale in North Dakota has been the major destination for the region's travelers over the past few years, but Minnesota will now be in direct competition for the area's labor pool.

In addition to providing forecasts for labor supply, demand and wage rates for 12 crafts, Industrial Info also quantifies the number of shortages and travelers for each craft in the analysis subscription. To see a demonstration on Industrial Info's labor analysis and risk assessment tool for the Bakken and Upper Midwest Region, with wage rate and per diem tracking, please contact Tony Salemme, vice president of Industrial Info's Craft Labor Group, at (209) 547-9878 or tsalemme@industrialinfo.com.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.