Grassroot Projects Scheduled to Begin Construction in First-Quarter 2012 Total $38 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Grassroot project activity has been a key factor in the recovery process for the industrial markets following the recession. While many companies have taken a cautious approach to spending and are focusing on smaller, incremental additions to their facilities in order to stay ahead of demand, grassroot plant activity is a good indicator of how confident companies are in the overall economic landscape in the United States. Looking ahead to the first quarter of 2012, Industrial Info is currently tracking $38 billion worth of grassroot projects that are scheduled to begin construction activities during the first three months of the year--a very solid start to the next 12 months.

Click on image at right for a breakdown by U.S. market region of planned grassroot project starts.

Three industries stand out when looking at who is planning grassroot project activity in the first quarter: the Alternative Fuels Industry, the Power Industry and the Oil & Gas Transmission Industry. The Alternative Fuels Industry has both the largest number of projects and the highest investment total pending for the quarter, with 68 grassroot projects worth an estimated $13.2 billion scheduled to begin construction during the first quarter, significantly more than any other industry.

The Power Industry, always a major player in the grassroot project world, is looking at almost 60 projects of its own worth an estimated $7.8 billion that are expected to begin construction during January, February or March. The Oil & Gas Transmission Industry will contribute another 39 projects worth an estimated $5.2 billion to the total, which means that these three key industries will account for 69% of the proposed grassroot spending total during the quarter.

Virtually every industry has at least some grassroot activity planned for the quarter. The largest contributors to the remaining 31% of the spending are expected to be the Metals & Minerals Industry with 19 projects worth an estimated $2.8 billion, the Food & Beverage Industry with 47 projects worth an estimated $2.9 billion and the Industrial Manufacturing Industry with 14 projects worth an estimated $2.1 billion.

If all of these projects do actually reach the construction stage of development, the Southwest region of the U.S. will be the big winner, with $12 billion of the proposed grassroot activity. This is significantly more than any other region. The Rocky Mountains region is expected to see $6.8 billion worth of grassroot investment while the Mid-Atlantic market region will play host to an additional $5.4 billion, and the Southeast and West Coast regions will each see more than $3.7 billion worth of grassroot project activity during the quarter.

Of course, not all of these projects will begin construction on time. There will be delays in permitting or financing for some, but judging by past performance, a significant portion of these projects will actually occur in the first quarter, which will give 2012 a very good starting point to build upon as the year progresses. Grassroot spending could easily top the $100 billion mark once the year is completed, given this good a start. Hopefully more projects will remain on track than will be delayed or canceled and 2012 will get off to a very good start, something that everyone would welcome, given the economic uncertainty facing the entire country.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.