First-Quarter Prospects for U.S. Chemical Industry Look Promising

---

Researched by Industrial Info Resources (Sugar Land, Texas)--As the current calendar year quickly comes to a close, attention is rapidly turning to how the approaching year will begin. Most major segments of the Chemical Processing Industry (CPI) experienced a slight uptick in overall capital spending during the latter half of the year, setting an optimistic tone as 2011 begins. Based on project activity planned for the CPI and identified by Industrial Info as part of its North American Project Database, total spending during the first quarter is expected to reach $1.35 billion. This is an increase of 28% over the first quarter of 2010, which reached an estimated $963 million, even after almost $1 billion in projects originally planned for the first quarter of 2011 have been placed on-hold or cancelled entirely.

The expectations for the first quarter of 2010 were not tremendous, as the country was still in the midst of a recession that had been ongoing for more than a year. Times are different now, but not all that different. There are expectations that the general economy is improving and that we should expect to see an increase in spending during 2011, although unemployment remains stubbornly high and other economic indicators continue to show just how burdened demand is likely to remain in the short term. Despite these obstacles industry confidence is rising, as evident in a nearly 20% increase in the number of projects planned for the first quarter of 2011, compared to the first quarter of last year. The average total investment value is expected to increase from nearly $6.2 million to nearly $7 million, another encouraging indicator for the approaching quarter.

The Southwest market region will be home to more than half of the total spending with an estimated $757 million, with the Great Lakes region following as a distant second with $178 million in planned projects for the first quarter. Some of the largest projects set to begin construction during this period are being planned by Shintech Louisiana LLC (Houston, Texas), Enterprise Products Pipeline LP (NYSE:EPD) (Houston), and Air Products & Chemicals Incorporated (NYSE:APD) (Allentown, Pennsylvania). Together, these three firms represent almost $400 million of the first-quarter spending, identified from just 13 individual projects.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR'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.