Released July 29, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info's North American Industrial Project Spending Index for June amounted to $370.73 billion, a drop of more than 26% from the June 2019 index. However, various industry groups are pointing to stronger signs of economic recovery.
The spending index, which measures the value of all active projects in the pipeline for the year, fell by $133.98 billion from the June 2019 total of $504.71 billion.
Spending fell in all but four of the 12 industries tracked by Industrial Info. Those industries that registered spending increases were Power, Alternative Fuels, Petroleum Refining and Pharmaceutical & Biotech.
Click on the image at right for a graph detailing the Spending Index.
The year-over-year drop in June is less than the 30% year-over-year drop of $174.09 billion seen in May. For more information, see June 26, 2020, article - IIR's North America Project Spending Index Dives in May, but Some Industries See Positive Signs Ahead.
One of the industries with a substantial year-over-year spending drop in June was Oil & Gas Production, which recorded a 76.19% reduction, or $45.15 billion. However, the American Petroleum Institute's (API) monthly statistical report for June reflected a rebound in U.S. demand.
U.S. petroleum demand increased nearly 9% to 17.6 million barrels per day in June in comparison with demand in May, the API said.
"Although we have a long way to go for U.S. petroleum markets to recover to pre-pandemic levels, the comeback broadly continued in June despite ongoing challenges with COVID-19," API Chief Economist Dean Foreman said in a July 16 press release.
On the supply side, however, U.S. crude oil production posted its seventh consecutive monthly decline in June, falling 0.4 million barrels per day to 11.0 million barrels per day, as producers continued to cope with lower energy demand as result of the pandemic. Production of natural gas liquids also declined in June, falling more than 1% month-over-month, the API said.
The June spending index for the North American Chemical Processing Industry dropped more than 56% year-over-year to $15.5 billion.
U.S. chemical industry metrics will be lower this year, according to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook. The ACC projected a rebound in 2021, although significant uncertainty remains.
"U.S. industrial activity started the year on a weak note even before COVID-19-related supply disruptions emerged in February," said Kevin Swift, chief economist at ACC. Still, despite the "sharpest pullback on record in April, many industrial sectors are showing signs of recovery," he added.
The ACC's Chemical Activity Barometer, an economic indicator for the industry, rose 2.7% in July on a three-month moving average basis, following a 0.1% gain in June, which is consistent with a recovery, Swift said.
The Institute of Supply Management (ISM) said economic activity in the manufacturing sector grew in June. The ISM's Purchasing Managers Index registered 52.6% in June, up from May's reading of 43.1%.
"June signifies manufacturing entering an expected expansion cycle after the disruption caused by the coronavirus pandemic... reversing the cautious trend, which began in March," said Timothy Fiore, chairman of the ISM's Manufacturing Business Survey Committee, in a press release.
The North American Spending Gap Index, which measures the amount of fallout from projects that have been cancelled, placed on hold or moved to another year, widened more than 79% to $342.78 billion in June, compared with $190.91 billion for the same month in 2019.
Click on the image at right for a view of the graph of the Spending Gap Index.
The spending gap widened in all but two (Chemical Processing and Pharmaceutical & Biotech) of the 12 industries tracked by Industrial Info. The gap has continued to expand this year on a month-by-month basis.
Industrial Info's June North American Construction Starts Index, which measures the amount of project activity that has been funded and started construction for the year, amounted to $111.52 billion in June, down more than 28% from the same month in 2019. Total investment values fell in all but one (Alternative Fuels) of the 12 industries tracked by Industrial Info.
Click on the image at right for a graph of the Construction Starts Index.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The spending index, which measures the value of all active projects in the pipeline for the year, fell by $133.98 billion from the June 2019 total of $504.71 billion.
Spending fell in all but four of the 12 industries tracked by Industrial Info. Those industries that registered spending increases were Power, Alternative Fuels, Petroleum Refining and Pharmaceutical & Biotech.
The year-over-year drop in June is less than the 30% year-over-year drop of $174.09 billion seen in May. For more information, see June 26, 2020, article - IIR's North America Project Spending Index Dives in May, but Some Industries See Positive Signs Ahead.
One of the industries with a substantial year-over-year spending drop in June was Oil & Gas Production, which recorded a 76.19% reduction, or $45.15 billion. However, the American Petroleum Institute's (API) monthly statistical report for June reflected a rebound in U.S. demand.
U.S. petroleum demand increased nearly 9% to 17.6 million barrels per day in June in comparison with demand in May, the API said.
"Although we have a long way to go for U.S. petroleum markets to recover to pre-pandemic levels, the comeback broadly continued in June despite ongoing challenges with COVID-19," API Chief Economist Dean Foreman said in a July 16 press release.
On the supply side, however, U.S. crude oil production posted its seventh consecutive monthly decline in June, falling 0.4 million barrels per day to 11.0 million barrels per day, as producers continued to cope with lower energy demand as result of the pandemic. Production of natural gas liquids also declined in June, falling more than 1% month-over-month, the API said.
The June spending index for the North American Chemical Processing Industry dropped more than 56% year-over-year to $15.5 billion.
U.S. chemical industry metrics will be lower this year, according to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook. The ACC projected a rebound in 2021, although significant uncertainty remains.
"U.S. industrial activity started the year on a weak note even before COVID-19-related supply disruptions emerged in February," said Kevin Swift, chief economist at ACC. Still, despite the "sharpest pullback on record in April, many industrial sectors are showing signs of recovery," he added.
The ACC's Chemical Activity Barometer, an economic indicator for the industry, rose 2.7% in July on a three-month moving average basis, following a 0.1% gain in June, which is consistent with a recovery, Swift said.
The Institute of Supply Management (ISM) said economic activity in the manufacturing sector grew in June. The ISM's Purchasing Managers Index registered 52.6% in June, up from May's reading of 43.1%.
"June signifies manufacturing entering an expected expansion cycle after the disruption caused by the coronavirus pandemic... reversing the cautious trend, which began in March," said Timothy Fiore, chairman of the ISM's Manufacturing Business Survey Committee, in a press release.
The North American Spending Gap Index, which measures the amount of fallout from projects that have been cancelled, placed on hold or moved to another year, widened more than 79% to $342.78 billion in June, compared with $190.91 billion for the same month in 2019.
The spending gap widened in all but two (Chemical Processing and Pharmaceutical & Biotech) of the 12 industries tracked by Industrial Info. The gap has continued to expand this year on a month-by-month basis.
Industrial Info's June North American Construction Starts Index, which measures the amount of project activity that has been funded and started construction for the year, amounted to $111.52 billion in June, down more than 28% from the same month in 2019. Total investment values fell in all but one (Alternative Fuels) of the 12 industries tracked by Industrial Info.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
