North American Pharmaceutical-Biotech Industry 2006 Capital Spending Outpaces 2005

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas). Negative press and product liability lawsuits aside, the Pharmaceutical-Biotech Industry continues to grow. A review of 2005 forecast projects for North America at the end of the 1Q2005 revealed that when compared to the 2006 numbers within the same time frame that while there was a drop in the total number of projects, there was an actual increase in spending of over 15%. Even when adjusting those numbers to reflect projects that were cancelled or put on hold as of the first quarter reviews, the total investment value (TIV) for 2006 increased over 2005 by just over 10% (reference: Pharmaceutical Tracker - Online Database).

Click on the image at right to view the 1Q06 Update Gap Measurement Chart for the North American Pharma-Biotech Industry

Forecast spending for 2005 originally called for 367 capital and maintenance projects to kick-off, carrying a TIV of $14.3 billion. First quarter updates of the 2005 project data reflected seventeen projects falling out thus leaving 350 active projects forecast for the year valued at $13.7 billion. A variety of reasons caused these projects to be taken out of play for the year. Some were flat out cancelled or put on hold due to anything from regulatory delays in product approvals or shaky finances (reference: 2006 Pharmaceutical-Biotech Forecast). Other projects that were “lost” were merely pushed out into 2006 and beyond. Those projects are progressing through the various project activity phases and the changes are reflected in everything from timing to site selection.

For 2006, the number of projects dropped to 353, but represented a TIV of $16.8 billion. The first quarter update revealed a loss of 29 projects and a drop in TIV to $15.1 billion. As the year progresses and new projects are added and existing ones updated, the numbers are sure to continue to change. Just as some of the projects that were scheduled for 2005 now fall under 2006, it is a sure bet that a number of those currently in 2006, will eventually land up in 2007 and beyond.

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