Capital and Maintenance Spending Planned in Great Lakes Region Totals $55 Billion for 2009

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Researched by Industrial Info Resources (Sugar Land, Texas)--In a region that has been suffering greatly because of the recent economic woes facing the country and the problems within an automotive industry that is the backbone of its economy, the Great Lakes region has been struggling just to maintain the status quo in terms of spending activity. Job losses, plant closings and project cancellations have been the norm for this region all throughout 2008. However, a look at what capital and maintenance project activity is already being planned for the region in 2009 shows an impressive $55 billion in total spending in the form of 752 projects being developed for the next 12 months.

Click on the image at right to see a breakdown of 2009 project spending in the Great Lakes region.

The Power Industry, a core industry nationwide, is potentially the biggest spender in the coming year in the Great Lakes region. With projects totaling more than $22 billion, the industry is planning some impressive investment throughout 2009. Chief among the planned projects are a proposed $2.9 billion, 1,000-megawatt (MW) AMP grassroot coal-fired generating station in Ohio; a $2.8, 770-MW billion grassroot coal-fired integrated gasification combined-cycle plant in Illinois; a $1.5 billion, 800-MW grassroot windfarm in Ohio; and the $850 million, 677-MW grassroot Cash Creek gas power station in Kentucky.

Following the Power Industry is the Alternative Fuels Industry, which has been making great strides in recent years, especially in the Great Lakes region where its main fuel sources are plentiful. In the coming year, the Alternative Fuels Industry is scheduled to spend more than $17 billion on capital and maintenance project work in the region. Some of the key projects driving this spending include a proposed $3.5 billion grassroot coal-to-gas plant in Kentucky, a $3 billion grassroot coal-to-liquids plant in Ohio and a $2 billion grassroot coal-to-substitute-natural-gas plant in Indiana.

Several other industries are contributing significant dollars to capital and maintenance work in the region during 2009, as well. The Chemical Processing Industry is expected to spend more than $6 billion for projects during the year, and the Metals & Minerals Industry will spend almost $5 billion. The Pharmaceutical & Biotech industry is expected to spend $1.2 billion. The Industrial Manufacturing Industry, traditionally a major player in the Great Lakes region, is only planning $1.1 billion in capital and maintenance work in the region at this time. This mainly is due to the collapse of the automotive sector.

A closer look at where the spending will take place within the Great Lakes region shows that Ohio and Illinois are expected to be the major players in the coming year with $20.7 billion and $16.7 billion, respectively, in capital and maintenance work planned for 2009. After those two heavyweights, the drop-off in spending is dramatic. Kentucky currently has $7 billion in project work planned while Indiana is planning $6 billion. Michigan and Wisconsin bring up the rear with a mere $2 billion in planned work each.

The preliminary spending outlook is quite broad and expansive for the Great Lakes region. The real question, as the New Year begins in a little over a month, is, Will these numbers hold out in the current economic climate? If the recession continues, and there are no signs that it will not, we can expect a number of these projects to be postponed until 2010 or beyond or be outright canceled. Once it is all said and done in 2009, the actual spending numbers will probably be significantly less than the current $55 billion that is planned, but only time will tell if these projects are able to get financed and built in a failing economy and if the region can justify this type of expenditure.

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