Did 2009 Leave Any Project Spending Momentum for the Chemical Industry in 2010?

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Researched by Industrial Info Resources (Sugar Land, Texas)--At this time last year, Industrial Info provided a look at how the Chemical Processing Industry (CPI) finished the 2008 calendar year, and what project spending momentum or lack of project spending momentum there would be for 2009. For details, see January 7, 2009, article - North American Chemical Industry Finishes 2008 with More Strength Than it was Credited. At the start of 2010, very few industry observers feel that performance in 2009 was strong enough to lead to significant momentum as the new year begins. This sentiment is well founded, considering total CPI project spending in the United States during 2009 fell to an estimated $4.4 billion. The real momentum for the CPI during the starting months of this year will be closely tied to the first-quarter performance of the financial markets domestically and abroad.

Chemical plant owners, like those in other industries, are anxious to see if financial markets can hold the gains they gathered during the closing weeks of 2009. The Dow eclipsed 10,500 and the S&P 500 Index topped 1,125 to the end the year, levels seen as positive and bullish by many investors. So far, each of these indexes has maintained these levels. Almost every material and feedstock commodity has started the year with strength in pricing, and many leading indicators show that these will remain strong through the first part of the year.

Considering the lagging housing data released over the past couple of months, the industry can expect to see very few investments in paints, coatings and chemicals used in building materials, as these commodities are generally produced and consumed domestically, where demand is most lacking. Areas that are expected to improve ahead of other sectors are plastics, resins, electronic chemicals, water treatment chemicals and specific niche segments. Core Chemical Industry segments such as petrochemicals will probably not improve by any significant measure until very late in the year.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.