North American Chemical Project Cancellations in 2007 Expected to Continue Decline over Past Years

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Researched by Industrial Info Resources (Sugar Land, Texas)--Each year, the statistics are formulated and greatly scrutinized to evaluate the level of project cancellations and delays in each of the industry verticals tracked by Industrial Info Resources as part of its North American Project Database. As the end of the calendar year approaches, this provides a nearly complete picture of the current year's performance and a chance to compare canceled projects or those placed on indefinite hold year over year. An early look at Chemical Processing Industry's (CPI) project activity in 2007 shows the potential for North American project cancellations or major delays to decline this year by an estimated 20% to only 108 projects so far.

Click on the image at right to view the North American Cancelled Chemical Project Analysis Chart

An estimated 135 capital and maintenance projects reported for the North American CPI with plans to begin construction in 2006 were canceled last year. These projects equaled a total investment value (TIV) of more than $2.2 billion. So far this year, a total of 108 CPI projects have been identified as canceled or placed on hold equaling a TIV of only $1.5 billion, a significant reduction in missed investment dollars over last year. In fact, of the $1.5 billion, half of those dollars are merely on hold, leaving the potential for them to be resurrected in the future and once again become a viable project opportunity.

A reduction in project cancellations this year is consistent with the overall momentum the CPI is experiencing despite the numerous obstacles that continue to come its way including volatile feedstock costs and imports from emerging markets just to name a few. The 108 projects identified in this analysis cover 32 different states and 21 different product sectors of the CPI. The hardest hit states were Texas and Louisiana with missed project opportunities totaling nearly $600 million, although when calculated into the $2.6 billion these states are forecast to see in new project activity this year, the number becomes quite small.

A significant change in the makeup of project cancellations this year compared to 2006 are the industry sectors affected the most. In 2006, agricultural chemicals including fertilizers along with producers of pigments saw the largest cancellations and delays totaling more than $550 million. In 2007 the tables have turned, and producers of plastics and polymers have so far seen 22 individual projects fall out equaling investments in excess of $530 million. This industry segment has performed better over the past several years than it has in nearly a decade, although some of its momentum is being lost to imports and lack of demand from international markets as new capacity becomes available abroad.

Industrial Info Resources (IIR) is the leading marketing information services company for the industrial process, heavy manufacturing and energy-related markets throughout the world. For more than 24 years, IIR has provided accurate and timely intelligence through products such as plant and project information databases, focused market databases, industry forecasting, key industry contacts, industry and territorial map products, direct marketing services and applications, and daily industry news.