North American Industrial Project Spending Index Shows 27% Growth in Project Spending for 2006

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Researched by Industrial Info Resources (Sugar Land, Texas). Industrial project spending for the North American market continues to show growth going into the end of the year, with its tenth consecutive month of growth, according to Industrial Info’s October update to the Industrial Project Spending Index. The Project Spending Index is a monthly indicator, comparing current year to previous year total investment value based on actual project construction starts, in order to get a measure of growth or contraction in the industrial market. The index takes into consideration spending details of twelve vertical markets - Power, Terminals, Oil & Gas Transmission, Oil & Gas Production, Alternative Fuels, Petroleum Refining, Chemical Processing, Metals & Minerals, Pulp, Paper, & Wood, Food & Beverage, Industrial Manufacturing, and Pharmaceutical & Biotech. It also analyzes spending by market region including monthly updates that measure the percent of change of activity between 2005 and 2006.

Project values are tallied based on scheduled construction starts. The actual expenditure of the project value will extend for the life of the project, which in the case of larger scale projects can extend 3-4 years.

Click on the image at right to see a graph showing the monthly movement of the spending index since the beginning of the year.

The attached graph shows line projection of monthly North American Industrial Project Spending index percentages. As can be seen from the graph, the index peaked in April 2006 at 33.42% growth. Since May, project spending growth has essentially remained steady at around 26%, with the exception of August, which saw a slight increase in growth. Each month in 2006 showed substantial growth when compared to analyzed project spending in 2005. Industrial project spending growth remains strong going into the last quarter of the year with no indications of a slowdown.

Only two of twelve vertical industries continue to experience negative growth in 2006. They are Terminals with -9.08% growth and Petroleum Refining with -36.09% growth. The Pulp Paper & Wood Industry, which had negative growth in August and September, has turned around and is now looking at 19.52% growth as of the October update.

Its not surprising that the Alternative Fuels Industry has taken the lead in project spending growth at 227.53%, as construction of new, grassroot biofuel (ethanol, biodiesel) processing plants has exploded this year. Other industries with impressive growth include Production (178.47%), Metals & Minerals (80.96%), Power (42.81%), Chemical Processing (40.98%), and Pharmaceutical & Biotechnology (30.21%).

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.