Grassroot Battery and Solar Panel Plants Highlight Second-Quarter U.S. Construction Starts in Industrial Manufacturing

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Researched by Industrial Info Resources (Sugar Land, Texas)--Coming off a difficult year, the Industrial Manufacturing Industry is trying to get back on its spending feet in the United States. With continued problems within the automotive sector, which is typically a strong spender in the U.S., the industry is looking for other areas in which to invest capital during 2010. While the year has started slowly, the second quarter, which is the beginning of the prime construction season, will begin small but shows some promise for a larger recovery as the year progresses. Currently, Industrial Info is tracking more than 120 capital and maintenance projects worth an estimated $1.9 billion that are scheduled to begin construction in the quarter.

Click on image at right for details of planned 2Q10 U.S. Industrial Manufacturing Industry project starts.

This spending is highlighted by a pair of grassroot battery plant projects, one in Michigan and one in California, and a grassroot solar panel plant, also in Michigan. Together, these three projects account for almost $650 million of the estimated $1.9 billion in capital and maintenance projects that will begin construction in the next three months.

In addition to the trio of major projects, a grassroot intermodal terminal, a significant upgrade to a university power plant and a quartet of grassroot distribution centers, with a combined value of $270 million, will contribute to the quarter's spending. These projects, which are spread across the country, will provide a base from which the Industrial Manufacturing Industry can build during the quarter.

For the first time in at least 18 months, the Great Lakes region of the country will lead the way in spending for the Industrial Manufacturing Industry during the coming quarter. This is good news for the industry, as the Great Lakes region is traditionally a major player each year in overall spending. However, with the demise of the American automotive sector and the major hits the region has taken to its manufacturing base as a result of the national recession, spending has been significantly curtailed. While more than $600 million in spending for a quarter is nothing compared to what the region was spending, it is a good start.

Other regions that will see significant spending for the quarter include the West Coast, another region that has suffered during the recession, with $450 million in total construction starts expected for the second quarter; the Northeast region, with $250 million in spending; and the Southwest region, with just less than $200 million in total spending. While these numbers are certainly not huge, they are an indication that companies are willing to invest in these troubled times, and hopefully the spending will only increase as the year develops.

Overall, spending within the industry continues to be slow. However, small signs of recovery continue to crop up each quarter. As more federal money is committed to rail projects, the U.S. should see the overall spending increase. As the American automakers continue their road to recovery, spending also should increase, a good thing for the heavily struggling Great Lakes region and the Southeast region. Hopefully, by the third quarter, we will see more significant spending across the U.S. as companies in the Industrial Manufacturing Industry loosen their purse strings and begin the re-investment process that will help heal the country as a whole.

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.