Industrial Manufacturing Industry Plans $28 Billion in North American Second Half Construction Starts

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Researched by Industrial Info Resources (Sugar Land, Texas). With the first half of 2007 coming to a close, a look at spending in the Industrial Manufacturing Industry shows that the year has been quite good in terms of capital and maintenance work in North America. As of the end of June, the Industrial Manufacturing Industry saw over 1,000 projects begin construction worth in excess of $35 billion in North America. The second half of the year already has the earmark of being almost as good as the first half. To date, Industrial Info Resources is tracking 800 capital and maintenance projects worth an estimated $28 billion that are scheduled to begin construction during the second half of 2007 within the Industrial Manufacturing Industry.

Click on the image at right to view a chart showing the breakdown of project starts by market region

Currently the Mid-Atlantic Region in the United States has a slight edge over the Great Lakes Region as the location of the most spending during the second half of 2007. The Mid-Atlantic Region is currently expected to be home to $5.1 billion worth of project activity while the Great Lakes Region is a close second at $4.8 billion. However, the Great Lakes Region has nearly double the number of projects that the Mid-Atlantic Region does – 161 versus 89.

The proposed $4 billion Dulles metrorail corridor project is the main reason the Mid-Atlantic Region is retaining a hold on the number one spot. This major commuter rail extension will involve the addition of 23 miles of rail line in Virginia and the first stages of construction are expected to begin in the late fall.

In the Great Lakes Region, automotive projects are keeping spending active, as they have for the last half-century. Despite recent woes, the automotive sector is still planning to spend significant amounts of money on expansions, retools and grassroot facilities in the region, the hub of the industry. Some of the key projects expected to begin construction later this year include a proposed $730 million grassroot engine plant in Michigan, a proposed $700 million grassroot axle plant, also in Michigan, a proposed $560 million grassroot transmission plant in Indiana, and a proposed $500 million engine plant expansion in Wisconsin.

Rounding out the top five spending regions are the U.S. Southeast Region with $4.1 billion (133 projects), the U.S Midwest region with $2.9 billion (70 projects), and the U.S. Rocky Mountains Region in with $2.6 billion (24 projects). As far as Mexican and Canadian regions go, Mexico makes the list at number six with $1.5 billion (22 projects) and the first Canadian region is Ontario at number eight at $1.1 billion (40 projects).

A closer examination of where project spending will be the hottest during the second half of the year shows Virginia at the top of the list, primarily due to the aforementioned rail project, with 16 projects worth $4.2 billion expected to begin construction. Michigan takes a firm hold on second place with 36 capital and maintenance projects worth an estimated $2.2 billion, while Mississippi at $1.8 billion (24 projects) is in third place. Coahuila, Mexico is in fourth place with $1.7 billion (3 projects) and New Mexico takes fifth place at $1.5 billion in the form of 4 projects.

So far, 2007 is shaping up to be a great year in terms of capital and maintenance spending with in the Industrial Manufacturing Industry. Rail and automotive spending combine for the majority of the spending this year, as they have for the last several years. Despite its problems, the automotive sector continues to crank out project work, however, now it is focused on various areas of the continent. Automotive activity in Mississippi, Georgia and other Southern states are helping to spread the wealth a bit. On the rail side of things, commuter and light rail projects continue to remain active across the entire continent as congestion becomes increasingly worse year after year. When it is all said and done, the Industrial Manufacturing Industry will have had an extremely good year in terms of overall capital and maintenance spending. This second half activity should give the industry the momentum it needs to continue the spending push into 2008.

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Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.