Great Lakes Region Begins 2010 with Healthy $10.7 Billion in First Quarter Spending

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Researched by Industrial Info Resources (Sugar Land, Texas)--For recovery to truly begin in the long-suffering Great Lakes region of the United States, industry must begin spending on projects in those states. This will create not only short-term construction jobs, but permanent and supporting jobs in the communities where plants are located. Now that the recession is showing signs of easing, much-needed spending is peeking out from behind the skirts of corporate decision-makers; $10.7 billion worth of investment is headed toward the Great Lakes region during the first quarter of 2010.

Click on image at right for a breakdown by industry of planned first quarter 2010 spending in the Great Lakes region.

In a region hungry for any investment, this is a good sign for overall spending in 2010. The early months of the year are not prime construction months, especially in the Great Lakes region, where weather can be prohibitive. Seeing more than $10 billion in proposed capital and maintenance spending is a shot in the collective arm.

As has been the case for the past two years, two industries are dominating the spending for the coming quarter. The Power Industry, a steady spender in the region at any time, is expected to see more than $5.3 billion worth of projects begin construction during the months of January, February or March 2010; the Alternative Fuels Industry, despite downturns in some sectors, is expected to see $2.4 billion in total spending.

While the spending totals for the balance of the industries investing in the region during the first quarter are much smaller, they should increase as the year progresses. Some of the other industries spending significant money in the region during the first quarter include the Industrial Manufacturing Industry, with 18 projects worth $894 million; the Metals and Minerals Industry, with 30 projects worth an estimated $695 million; and the Chemicals Industry, with 21 capital or maintenance projects expected to begin construction worth an estimated $653 million.

Where the investment is expected to take place is just about as important as who is doing the investing. For the first quarter, the state of Ohio will take top honors with just more than $4 billion in 45 capital or maintenance projects expected to begin construction. Illinois, a consistent spender in the past two years, has a firm hold on second place for the coming quarter, with $3 billion and 50 projects. Michigan also will see significant investment, at $1.4 billion with 37 projects.

Spending has been difficult to come by in this region for the past few years. The collapse of the automotive sector has caused many problems since there was, and continues to be, a significant automotive presence in the region. The numerous plant closures and worker layoffs, coupled with the resulting supplier closures and infrastructure collapses caused by the lack of business, have ravaged much of the region.

However, this level of spending, especially in a quarter unfriendly to construction, is very promising for the region. As the recession continues to ease and the automotive sector continues to recover, we should see the Great Lakes region recover as well. While it is not expected to return to the levels of spending it exhibited before the recession and the automotive collapse, at least until the region develops alternate industry to replace the automotive sector, the region can rebound to respectable levels once again through some careful planning and some innovative economic development aimed at attracting industry. Next year probably will not see the region return to glory days, but judging by the spending in the first quarter, it is well on its way to overall recovery.

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.