Industrial Manufacturing Industry Scheduled to Begin Construction on $9 Billion in U.S. Capital & Maintenance Projects in Second-Quarter 2012

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Researched by Industrial Info Resources (Sugar Land, Texas)--In terms of Industrial Manufacturing Industry capital and maintenance spending in the United States, 2011 was a good year. Through the recession and in the first years of recovery, the Industrial Manufacturing Industry saw total spending decline, but 2011 was the year that reversed that trend. Heading into 2012, spending seemed to be solid once again. Given the overall state of the economy and the mild winter months, companies have been investing at a more rapid pace than expected. Looking ahead to the second quarter of the year, $9 billion in capital and maintenance projects are currently scheduled to begin construction within the U.S. Industrial Manufacturing Industry, which is a good indicator of things to come.

Click on image at right for a breakdown by market region of planned 2Q12 Industrial Manufacturing projects in the U.S.

The West Coast region of the country, which consists of the states of California, Oregon, Washington, Hawaii and Alaska, is expected see the most significant investment for the quarter, with $3.3 billion in projects currently scheduled to begin construction. This spending is being driven by several rail projects that are expected to begin construction activities in the months of April, May or June. Rail projects have played a significant role in spending on the West Coast for a number of years and are expected to provide thousands of jobs in the coming years as well.

The Mid-Atlantic region, which consists of the states of Maryland, North Carolina, South Carolina, Virginia and West Virginia, will see the second-highest concentration of spending for the quarter with $2.4 billion in capital and maintenance projects scheduled to begin construction. Automotive and plastics projects will help boost spending in this region. The Southeast region, or the states of Alabama, Florida, Georgia, Mississippi and Tennessee, will also see some significant investment, with $1.1 billion in projects planned to begin construction during the quarter.

Automotive and rail-related projects have been buoying spending within the Industrial Manufacturing Industry throughout the recovery period after the recession. Rail has consistently churned out high-dollar projects for many years, although the financing of these projects has begun to move away from the more traditional city, state or federal financing model to public-private partnerships where companies pony up more of a stake in the enterprise, hoping to garner financial gain down the road once the projects are completed and operational.

The automotive sector has done a fantastic job of revitalizing itself after the troubled times of recent years. Pre-recession spending in the automotive sector hovered around the $10 billion-per-year mark, and while taking a significant dip during the recession and the first years of recovery, automakers have managed to get back in line with that type of spending, but in a much more responsible manner. Reckless spending was one of the reasons two of the three American automakers ended up in bankruptcy protection in 2009, and all automakers have apparently learned from their mistakes, making changes in how they are operating which has led to a resurgence of spending in this key sector.

The overall spending situation for the Industrial Manufacturing Industry has improved greatly within the Industrial Manufacturing Industry in the U.S., and that is not likely to change in the near future. Total spending is expected to continue to increase as the summer unfolds, and that momentum could improve through the fall and winter of 2012-13 provided the weather cooperates once again. While in general companies are trending to spend less on individual projects throughout the industry, enough major expenditures are continuing to be planned to give 2012 a shot at surpassing 2011's total investment by the year's end, and the $9 billion in projects scheduled to begin construction during the second quarter will hopefully keep this momentum going for the months to come.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.