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Released August 04, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)-- Spending in the Industrial Manufacturing Industry is very strong and shows little sign of letting up, David Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry, said in a recent IIR webinar. However, the industry, which includes automotive, semiconductors and computers, warehousing and distribution, heavy manufacturing and other sectors, faces some challenges, whether from supply-chain issues, labor market tightness or geopolitical situations.
There were not a lot of project cancellations in the Industrial Manufacturing Industry with the onset of the COVID-19 pandemic. What did occur was the deferment of projects into 2021 or later, and spending came back in a big way and continues to stay strong as the world grows accustomed to the "new normal."
Automotive
The Great Lakes region has been the traditional home of the U.S. automotive sector, and in the last several years, the Southeast has become home to the manufacturing operations of many foreign automotive companies. Automotive spending in these regions is expected to stay strong, especially as the world transitions to electric vehicles (EVs), which has caused a bump in spending. Automotive spending in North America is expected to be more than $35 billion this year.
Most automotive companies have set goals for a certain percentage of their vehicle production to be electric by 2025 and 2030. The U.S. has been somewhat tepid in its adoption of EVs for a number of reasons. EVs are typically more expensive than combustion-engine vehicles, narrowing the consumer market. In addition, the U.S. has a lack of charging infrastructure. There are about 50,000 charging stations in the country right now, and the Biden administration is aiming to boost this number to 500,000. However, only about 3,000 charging stations were built last year, showing that the country must play a rapid game of catch-up if the U.S. is to more fully embrace EV technology.
Industrial Info is seeing some reshoring of automotive parts production to the U.S. to help with the EV conversion--a trend likely to continue as EV demand grows. More than 50% of North American automotive spending is based on EVs and their batteries.
Semiconductors and Computers
The Rocky Mountain region, thanks to Arizona, and now the Southwest region, thanks in large part to a $10 billion Samsung (Suwon, South Korea) project in Texas, show strong activity in the semiconductor sector. The U.S. government is taking an active role in increasing semiconductor manufacturing in the U.S., recently passing legislation that provides $52 billion in subsidies for chip manufacturing and $24 billion in tax credits.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for more details on Samsung's Texas project.
The global semiconductor shortage has been a hindrance to several industries, particularly the automotive sector, and companies are vying for market space in a high-demand market, leading to a bump in project activity in a sector that typically operates in five- to six-year cycles.
This sector is particularly vulnerable to geopolitics, as Taiwan produces about 65% of the world's semiconductors, and possible threats from China regarding the territory's independence loom.
Data Centers
Construction of data centers was given a boost by the pandemic as the world turned online for working, learning, socializing and shopping--all of which would not have been possible without these facilities. Data centers are springing up throughout the U.S., with the Mid-Atlantic region making a particularly strong showing due to its ideal climactic conditions for these facilities. North American data center spending is expected to be about $32.5 billion this year.
Construction of data centers is driven by tech's leading players, such as Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington), Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California) and Alphabet Incorporated (NASDAQ:GOOGL) (Mountain View, California), but also by dedicated data center players providing colocation opportunities to smaller companies and entities.
Distribution and Warehousing
Linked to the rise in online shopping is the buildout of distribution and warehousing facilities. The growing trend of shopping for and ordering products from the convenience of home (and shorter delivery times) has necessitated increased distribution and warehousing facilities throughout North America. While these have previously been, and to some extent still are, multimillion-square-foot, behemoth facilities, construction is now trending to smaller centers within reach of larger population centers.
There is some question that if the economy does slow, as it has over the past two quarters, whether the amount of buildout in this sector will maintain its current pace.
For those who missed this webinar or those who would like to listen to it again to learn about the industry as a whole and other specific sectors such as heavy manufacturing and transportation systems, the presentation soon will be available in Industrial Info's on-demand webinar library.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
There were not a lot of project cancellations in the Industrial Manufacturing Industry with the onset of the COVID-19 pandemic. What did occur was the deferment of projects into 2021 or later, and spending came back in a big way and continues to stay strong as the world grows accustomed to the "new normal."
Automotive
The Great Lakes region has been the traditional home of the U.S. automotive sector, and in the last several years, the Southeast has become home to the manufacturing operations of many foreign automotive companies. Automotive spending in these regions is expected to stay strong, especially as the world transitions to electric vehicles (EVs), which has caused a bump in spending. Automotive spending in North America is expected to be more than $35 billion this year.
Most automotive companies have set goals for a certain percentage of their vehicle production to be electric by 2025 and 2030. The U.S. has been somewhat tepid in its adoption of EVs for a number of reasons. EVs are typically more expensive than combustion-engine vehicles, narrowing the consumer market. In addition, the U.S. has a lack of charging infrastructure. There are about 50,000 charging stations in the country right now, and the Biden administration is aiming to boost this number to 500,000. However, only about 3,000 charging stations were built last year, showing that the country must play a rapid game of catch-up if the U.S. is to more fully embrace EV technology.
Industrial Info is seeing some reshoring of automotive parts production to the U.S. to help with the EV conversion--a trend likely to continue as EV demand grows. More than 50% of North American automotive spending is based on EVs and their batteries.
Semiconductors and Computers
The Rocky Mountain region, thanks to Arizona, and now the Southwest region, thanks in large part to a $10 billion Samsung (Suwon, South Korea) project in Texas, show strong activity in the semiconductor sector. The U.S. government is taking an active role in increasing semiconductor manufacturing in the U.S., recently passing legislation that provides $52 billion in subsidies for chip manufacturing and $24 billion in tax credits.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for more details on Samsung's Texas project.
The global semiconductor shortage has been a hindrance to several industries, particularly the automotive sector, and companies are vying for market space in a high-demand market, leading to a bump in project activity in a sector that typically operates in five- to six-year cycles.
This sector is particularly vulnerable to geopolitics, as Taiwan produces about 65% of the world's semiconductors, and possible threats from China regarding the territory's independence loom.
Data Centers
Construction of data centers was given a boost by the pandemic as the world turned online for working, learning, socializing and shopping--all of which would not have been possible without these facilities. Data centers are springing up throughout the U.S., with the Mid-Atlantic region making a particularly strong showing due to its ideal climactic conditions for these facilities. North American data center spending is expected to be about $32.5 billion this year.
Construction of data centers is driven by tech's leading players, such as Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington), Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California) and Alphabet Incorporated (NASDAQ:GOOGL) (Mountain View, California), but also by dedicated data center players providing colocation opportunities to smaller companies and entities.
Distribution and Warehousing
Linked to the rise in online shopping is the buildout of distribution and warehousing facilities. The growing trend of shopping for and ordering products from the convenience of home (and shorter delivery times) has necessitated increased distribution and warehousing facilities throughout North America. While these have previously been, and to some extent still are, multimillion-square-foot, behemoth facilities, construction is now trending to smaller centers within reach of larger population centers.
There is some question that if the economy does slow, as it has over the past two quarters, whether the amount of buildout in this sector will maintain its current pace.
For those who missed this webinar or those who would like to listen to it again to learn about the industry as a whole and other specific sectors such as heavy manufacturing and transportation systems, the presentation soon will be available in Industrial Info's on-demand webinar library.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
