Released June 26, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info's North American Industrial Project Spending Index for May amounted to $396.18 billion, a drop of more than 30% from the May 2019 index.
The spending index, which measures the value of all active projects in the pipeline for the year, fell by $174.09 billion from the May 2019 total of $570.27 billion.
Spending fell in all but two (Oil & Gas Terminals and Pharmaceutical & Biotech) of the 12 industries tracked by Industrial Info.
Click on the image at right for a graph detailing the Spending Index.
Oil & Gas Production took one of the biggest year-over-year spending hits in May, dropping by 76% to $17.67 billion.
As of May, U.S. drilling activity had fallen by a record 70% in response to the massive decline in demand, according to the American Petroleum Institute (API).
Reduced drilling activity in May led to a 0.6 million-barrel-per-day (BBL/d) decrease in U.S. crude oil production from April's numbers, the API said. May's oil production averaged 11.4 million BBL/d.
However, U.S. natural gas liquids production held relatively steady at 4.8 million BBL/d, down 0.8% from production in April, the API said.
On the positive side, the gradual reopening of state economies drove a rebound in U.S. energy markets in May, with U.S. petroleum demand increasing 14% to 16.2 million barrels per day (BBL/d), the API said. Motor gasoline accounted for more than 80% of the demand increase, with monthly deliveries growing nearly 29% to 7.3 million barrels per day after hitting a multi-decade low in April.
"The uptick in demand associated with the gradual reopening of state economies leads us to be cautiously optimistic that the worst may be behind us," said API Chief Economist Dean Foreman in a press release.
Project spending within the Industrial Manufacturing Industry also was hammered last month, plunging nearly 43% to $90.64 billion in comparison with May 2019.
The Institute of Supply Management (ISM) said manufacturing activity contracted again in May, but the overall U.S. economy returned to expansion after one month of contraction. The May Purchasing Managers Index registered 43.1%, compared with 41.5% in April.
"The coronavirus pandemic impacted all manufacturing sectors for the third straight month. May appears to be a transition month, as many panelists and their suppliers returned to work late in the month. However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders, said Timothy Fiore, chairman of the ISM's Manufacturing Business Survey Committee, in a press release.
The North American Spending Gap Index, which measures the amount of fallout from projects that have been cancelled, placed on hold or moved to another year, saw a year-over-year increase of 153%, totaling $317.33 billion in May, compared with $125.35 billion for the same month in 2019.
Click on the image at right for a view of the graph of the Spending Gap Index.
The spending gap widened in all but one (Chemical Processing) of the 12 industries tracked by Industrial Info. Braskem S.A. (NYSE:BAK) (Sao Paulo, Brazil) announced on Wednesday that construction was completed on its 1 billion-pound-per-year polypropylene facility in La Porte, Texas; and Sasol Limited (NYSE:SSL) (Johannesburg, South Africa) said the 30,000-ton-per-year Guerbet alcohols unit at its Lake Charles Chemicals Project (LCCP) in Louisiana achieved beneficial operation on June 19, marking the sixth LCCP unit to be brought into production. For more information, see Industrial Info's project reports on the Braskem facility and the Sasol unit.
The spending gap has continued to expand this year on a month-by-month basis.
Industrial Info's May North American Construction Starts Index, which measures the amount of project activity that has been funded and started construction for the year, amounted to $94.94 billion in May, down 20.5% from the same month in 2019. Total investment values fell in all but four of the 12 industries tracked by Industrial Info.
Click on the image at right for a graph of the Construction Starts Index.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The spending index, which measures the value of all active projects in the pipeline for the year, fell by $174.09 billion from the May 2019 total of $570.27 billion.
Spending fell in all but two (Oil & Gas Terminals and Pharmaceutical & Biotech) of the 12 industries tracked by Industrial Info.
Oil & Gas Production took one of the biggest year-over-year spending hits in May, dropping by 76% to $17.67 billion.
As of May, U.S. drilling activity had fallen by a record 70% in response to the massive decline in demand, according to the American Petroleum Institute (API).
Reduced drilling activity in May led to a 0.6 million-barrel-per-day (BBL/d) decrease in U.S. crude oil production from April's numbers, the API said. May's oil production averaged 11.4 million BBL/d.
However, U.S. natural gas liquids production held relatively steady at 4.8 million BBL/d, down 0.8% from production in April, the API said.
On the positive side, the gradual reopening of state economies drove a rebound in U.S. energy markets in May, with U.S. petroleum demand increasing 14% to 16.2 million barrels per day (BBL/d), the API said. Motor gasoline accounted for more than 80% of the demand increase, with monthly deliveries growing nearly 29% to 7.3 million barrels per day after hitting a multi-decade low in April.
"The uptick in demand associated with the gradual reopening of state economies leads us to be cautiously optimistic that the worst may be behind us," said API Chief Economist Dean Foreman in a press release.
Project spending within the Industrial Manufacturing Industry also was hammered last month, plunging nearly 43% to $90.64 billion in comparison with May 2019.
The Institute of Supply Management (ISM) said manufacturing activity contracted again in May, but the overall U.S. economy returned to expansion after one month of contraction. The May Purchasing Managers Index registered 43.1%, compared with 41.5% in April.
"The coronavirus pandemic impacted all manufacturing sectors for the third straight month. May appears to be a transition month, as many panelists and their suppliers returned to work late in the month. However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders, said Timothy Fiore, chairman of the ISM's Manufacturing Business Survey Committee, in a press release.
The North American Spending Gap Index, which measures the amount of fallout from projects that have been cancelled, placed on hold or moved to another year, saw a year-over-year increase of 153%, totaling $317.33 billion in May, compared with $125.35 billion for the same month in 2019.
The spending gap widened in all but one (Chemical Processing) of the 12 industries tracked by Industrial Info. Braskem S.A. (NYSE:BAK) (Sao Paulo, Brazil) announced on Wednesday that construction was completed on its 1 billion-pound-per-year polypropylene facility in La Porte, Texas; and Sasol Limited (NYSE:SSL) (Johannesburg, South Africa) said the 30,000-ton-per-year Guerbet alcohols unit at its Lake Charles Chemicals Project (LCCP) in Louisiana achieved beneficial operation on June 19, marking the sixth LCCP unit to be brought into production. For more information, see Industrial Info's project reports on the Braskem facility and the Sasol unit.
The spending gap has continued to expand this year on a month-by-month basis.
Industrial Info's May North American Construction Starts Index, which measures the amount of project activity that has been funded and started construction for the year, amounted to $94.94 billion in May, down 20.5% from the same month in 2019. Total investment values fell in all but four of the 12 industries tracked by Industrial Info.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
