Released January 20, 2022 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--After rough times in 2020, North America's overall industrial project spending rose in 2021, showing a dramatic bounce-back in activity, according to Industrial Info's latest North American Industrial Project Spending Index.
The Project Spending Index is a monthly indicator that compares active spending rates with the previous year in order to get a measure of growth or contraction in the industrial market. The index provides spending details by industry and market region.
The index shows that spending rose each month last year when compared with the same month in 2020. In contrast, spending for each month in 2020 fell when compared with the same months of 2019.
The spending levels in 2020 and 2021 almost look like mirror images. The impact of the COVID-19 pandemic in 2020 on consumer spending, travel, labor availability, oil prices and international supply chains was evident among all 12 industries tracked by Industrial Info. On a percentage basis, spending fell the most in May 2020, down 31% from May 2019.
Click on the image at right for a chart showing project spending growth and contraction for each month of 2021 and 2022.
Overall spending began to turn a corner in January 2021, which showed a 3% rise over the same month a year earlier, and has remained positive since then, registering year-over-year growth of 38% in June 2021.
But not all industries have seen such positivity. Petroleum refining project spending for all of North America (the U.S., Canada and Mexico), remained in contraction mode in 2021. However, refinery spending in December increased substantially over the same month of 2020 in the U.S. and Canada, while falling in Mexico.
Meanwhile, industries such as Power, Food & Beverages and Industrial Manufacturing showed year-over-year increases for all of 2021.
While the situation is cause for optimism, looking forward, COVID-19's stubborn grip on the economy, inflation and lingering supply-chain issues could dampen spending growth.
The U.S. Federal Reserve reported last week that on a month-over-month basis, industrial production fell 0.1% in December for the first time since September. Losses of 0.3% for manufacturing and 1.5% for utilities were mostly offset by a gain of 2.0% in mining (reflecting gains in the oil and gas sector).
Output of motor vehicles and parts dropped 1.3% in December and was about 6% lower than its year-earlier level, according to the Federal Reserve. Output of wood products and nonmetallic mineral products rose 1.2% and 1.5%, respectively, while chemicals posted a gain of 0.7%.
For the fourth quarter as a whole, total industrial production rose at an annual rate of 4.0%. The Institute for Supply Management said economic activity in the manufacturing sector grew in December, albeit at a slower pace than in November.
The December Manufacturing Purchasing Managers Index (PMI) registered 58.7%, a decrease of 2.4 percentage points from the November reading of 61.1%, but still indicating expansion in the overall economy for the 19th month in a row after a contraction in April 2020, Timothy Fiore, chair of the ISM's Manufacturing Business Survey Committee, said in a January 4 press release.
"The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with indications of improvements in labor resources and supplier delivery performance. Shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products continue to plague reliable consumption," Fiore said. "Coronavirus pandemic-related global issues--worker absenteeism, short-term shutdowns due to parts shortages, employee turnover and overseas supply chain problems--continue to impact manufacturing. However, panel sentiment remains strongly optimistic, with six positive growth comments for every cautious comment, down slightly from November."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn.
The Project Spending Index is a monthly indicator that compares active spending rates with the previous year in order to get a measure of growth or contraction in the industrial market. The index provides spending details by industry and market region.
The index shows that spending rose each month last year when compared with the same month in 2020. In contrast, spending for each month in 2020 fell when compared with the same months of 2019.
The spending levels in 2020 and 2021 almost look like mirror images. The impact of the COVID-19 pandemic in 2020 on consumer spending, travel, labor availability, oil prices and international supply chains was evident among all 12 industries tracked by Industrial Info. On a percentage basis, spending fell the most in May 2020, down 31% from May 2019.
Overall spending began to turn a corner in January 2021, which showed a 3% rise over the same month a year earlier, and has remained positive since then, registering year-over-year growth of 38% in June 2021.
But not all industries have seen such positivity. Petroleum refining project spending for all of North America (the U.S., Canada and Mexico), remained in contraction mode in 2021. However, refinery spending in December increased substantially over the same month of 2020 in the U.S. and Canada, while falling in Mexico.
Meanwhile, industries such as Power, Food & Beverages and Industrial Manufacturing showed year-over-year increases for all of 2021.
While the situation is cause for optimism, looking forward, COVID-19's stubborn grip on the economy, inflation and lingering supply-chain issues could dampen spending growth.
The U.S. Federal Reserve reported last week that on a month-over-month basis, industrial production fell 0.1% in December for the first time since September. Losses of 0.3% for manufacturing and 1.5% for utilities were mostly offset by a gain of 2.0% in mining (reflecting gains in the oil and gas sector).
Output of motor vehicles and parts dropped 1.3% in December and was about 6% lower than its year-earlier level, according to the Federal Reserve. Output of wood products and nonmetallic mineral products rose 1.2% and 1.5%, respectively, while chemicals posted a gain of 0.7%.
For the fourth quarter as a whole, total industrial production rose at an annual rate of 4.0%. The Institute for Supply Management said economic activity in the manufacturing sector grew in December, albeit at a slower pace than in November.
The December Manufacturing Purchasing Managers Index (PMI) registered 58.7%, a decrease of 2.4 percentage points from the November reading of 61.1%, but still indicating expansion in the overall economy for the 19th month in a row after a contraction in April 2020, Timothy Fiore, chair of the ISM's Manufacturing Business Survey Committee, said in a January 4 press release.
"The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with indications of improvements in labor resources and supplier delivery performance. Shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products continue to plague reliable consumption," Fiore said. "Coronavirus pandemic-related global issues--worker absenteeism, short-term shutdowns due to parts shortages, employee turnover and overseas supply chain problems--continue to impact manufacturing. However, panel sentiment remains strongly optimistic, with six positive growth comments for every cautious comment, down slightly from November."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn.
