North American Metals and Minerals Industry Project Activity Grows to $60 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Improving commodity prices and non-residential and energy construction are spurring project activity for the North American Metals & Minerals Industry in 2017. Industrial Info's North American Industrial Project Spending Index is up 9% for construction activity in 2017 when compared with 2016.

February marked the fourth straight month of improvement for the index, which measures industrial project construction starts compared with a year earlier. After experiencing a multiple years of declines in project activity, Metals & Minerals is one of the industries seeing increased activity this year. At this time last year, Metals & Minerals firms were proposing about $43 billion in construction starts for 2016, while this year they are looking at just less than $60 billion. In the U.S., project activity is up 36%, while Canada is up 43% and Mexico is up 40%.

Steel mill capacity utilization is up slightly, due to more demand from non-residential construction and oil & gas development improvements. Steel makers are enjoying increased demand. Several steel manufacturers are looking at increased spending this year as a result. ArcelorMittal, the world's largest steel producer, is increasing capital spending in 2017 to $2.9 billion from $2.44 billion in 2016.

In the U.S., Nippon Steel (Tokyo, Japan) is spending $50 million to construct a new steel wire manufacturing plant in Shelbyville, Indiana, to support the automotive industry.

Although coming off recent highs, commodity prices for gold, iron ore, zinc and copper have improved significantly over the past year, which is a leading indicator for increased spending in the mining sector. In 2017, Newmont Mining (NYSE:NEM) (Greenwood Village, Colorado) is planning to boost its exploration and advanced projects expenditure by 22%, with about two-thirds of that amount going to fund more brownfields and exploration.

Overall, there is growing optimism within the industry, which is starting to translate into more capital expenditures.

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