Great Lakes Region Offers Diverse Industrial Base for Equipment Suppliers

---

Industrial Info Resources (Sugar Land, Texas) is currently tracking more than 10,500 active industrial projects across the U.S. that have already begun construction or are planning to begin construction in 2013 and 2014. Most U.S. regions have continued to show steady growth in industrial spending after the economic downturn of 2008-09, providing increasing opportunities for industrial equipment and service providers. In particular, the Great Lakes region, which was particularly hard-hit by the recession, has shown a strong uptick in industrial spending.

In terms of combined project value, California (with several high-dollar solar energy projects) and Texas and Louisiana (with massive liquefied natural gas and petrochemicals projects) lead states for planned near-term industrial spending. On a regional basis, however, the Great Lakes market region (defined by Industrial Info as Wisconsin, Illinois, Kentucky, Michigan, Indiana and Ohio) represents an area of strong industrial activity, providing both a high dollar-amount in terms of total project investments, as well as a high number of planned project starts.

Industrial Info is tracking 1,800 active capital and maintenance projects with an estimated combined total investment value of almost $80 billion that are planned to begin in 2013 and 2014 in the Great Lakes region. The opportunities for equipment and service providers in the region are substantial. According to Industrial Info's Pipes, Valves &Fittings Market Assessment, more than $3.54 billion will be spent in the Great Lakes PVF market in 2013-14, driven in large part by the Power and Chemical Processing industries.

As with most regions of the U.S., the Power Industry, which has approximately $28.4 billion in projects planned to kick off in the Great Lakes through 2014, leads the area in terms of planned spending. Most of the Power Industry spending in the region comes from two fuel sources: wind and, more importantly for the PVF sector, natural gas. While windfarms along the Great Lakes coasts constitute the lion's share of project spending, natural gas-fired project starts add up to approximately $5 billion in spending for the two years, helping boost overall estimated PVF spending in the power sector to more than $715 million.

Click on image at right for a breakdown by industry of planned 2013-14 project starts in the U.S. Great Lakes region.

At first glance, the Alternative Fuels Industry appears to be a strong player for 2013-14 spending in the region, with almost $21 billion in planned project starts. However, uncertainty remains about some of the activity within this industrial sector in regard to various coal liquefaction and gasification projects. While Industrial Info expects a relatively high rate of project fallout within this sector, if these projects move forward, they will provide substantial spending activity and opportunities for equipment providers.

In terms of anticipated 2013-14 project activity, the Chemical Processing Industry holds its own against the behemoth Power Industry in the Great Lakes, with anticipated PVF spending of more than $678 million. Outside of the petrochemical powerhouse of Texas and Louisiana, the Great Lakes area provides the most significant near-term spending in the Chemicals Industry, particularly in the states of Ohio and Indiana. One of the strongest contributors to this relatively high spending is, as with so many other industrial projects, the result of inexpensive natural gas feedstock to produce a high demand product--nitrogenous fertilizers. Among the companies making a move in this area are PCS Nitrogen, Inc., a subsidiary of Potash Corporation of Saskatchewan, and Midwest Fertilizer Corporation, which is part of Pakistan-based Fatima Group.

While the Chemical Processing and Power industries dominate the region in terms of spending, perhaps the most important aspect for equipment providers is the high number and diversity of projects in the area. While not the highest overall spender for 2013-14 project starts, the Great Lakes offers by far the highest number of projects, allowing more opportunities for equipment suppliers to grab a foothold in the regional market.

Click on image at right for a breakdown by U.S. market region for planned spending in the Power, Metals & Minerals, and Industrial Manufacturing industries.

The six-state region, in fact, has the highest number (if not the highest dollar amount) of Power Industry projects planned to kick off in the 2013-14 period, as well as two other extremely diverse sectors: Metals &Minerals (mines, metals processing, steel mills, cement production, etc.) and Industrial Manufacturing (aircraft and vehicle assembly, injection molding, warehouses and distribution centers, and much more). Construction of Iron processing facilities, as well as expansions and additions for a newly revitalized automotive sector are contributing substantially to area spending.

In short, industrial equipment providers that have the opportunity to enter the Great Lakes industrial market region would be well advised to do so. After being incredibly hard-hit by the Great Recession of 2008-09, the area has once again become a leader in industrial spending, and with more than $3.5 billion in forecast PVF spending through 2014, the area's numerous projects and diverse industrial sectors provide substantial chances for niche equipment providers to enter the market.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, 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.