Planned Industrial Construction Spending in Western Canada Increases 45% Over 2005 Levels to $29.8 Billion in 2006

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Researched by Industrialinfo.com (Industrial Info Resources; Houston, Texas). Industrial sector capital and maintenance expenditures have increased from $20 billion in 2005 to a total of $29.82 billion in 2006. The project count increased as well from 207 individual projects in 2005 to 225 projects in 2006. The average expenditure per project also increased from $96.69 million in 2005 to $132.56 million in 2006. Beyond these averaged figures, there are some substantial differences in sector spending. The lion’s share of the spending will focus on the production of resources headed for the world’s commodity markets.

The industrial sectors of mining & minerals, electric power generation, oil & gas, and petroleum refining will be the focus of the investment for 2006 and for the foreseeable future. These industrial sectors will see $23.63 billion in spending out of the total of $29.82 billion currently scheduled for the region of Western Canada. These areas will also be home to 124 of the 225 projects currently being tracked. Mining & minerals will lead the pack with a total of 43 projects representing $12.15 billion in spending and averaging $282.65 million in expenditures for projects. A high percentage of this total will be concentrated in the oil sands patch centered around Fort McMurray where the resource is near enough to the surface to be mined and converted into bitumen.

For the purpose of grouping by product, the oil & gas sector will see thirteen major projects representing $2.91 billion, with an average project value of $224 million set to begin construction in 2006. Again, the high majority of these projects will be concentrated in the area of bitumen production from in-situ oil sands sources in Northern Alberta.

Spending in the Petroleum Refining Industry is predicted to reach $1.92 billion in 2006. The total project count of 21 represents major projects with an average total investment value of $91.43 million per project. As with mining & minerals and oil & gas, a substantial portion of this total amount will be focused on the refining of bitumen into a higher-value synthetic crude oil for consumption in Canada as well as the U.S.

In support of all industrial, commercial and residential users, electric power generation spending for 2006 in the area is estimated at $6.64 billion spread across 47 individual projects representing an average monetary expenditure of $141.43 million per project.

Originally, Industrialinfo.com had been tracking 247 projects worth a total of $33.8 billion across the industrial sector in Western Canada. As time closed in on 2006, several projects were either placed on hold, postponed or were cancelled outright. Adding into this mix, some new projects emerged as well giving to a ratio of .91 for total projects and a ratio of .88 for total spending, holding true so far for 2006 from the predicted amount. As 2006 comes to a close, these ratios will change further from last minute decisions for delays and or additions of new projects with a smaller dollar amount coming into play. As for the large dollar projects, these will either go into a construction play or not, but the lead time on the large projects is such as not to expect new ones to pop up to take the place of one that was delayed.

Looking to 2006 and beyond for Western Canada, the investment dollars really begin to swell. Including the above numbers for 2006, Industrialinfo.com is actively tracking 460 individual projects totaling $141.43 billion in spending with an average project value of $307 million.

Click on the image at right to view 2006 & Beyond Western Canadian Industrial Project Spending Analysis

When looking at the table showing the spending activity for the region, it becomes clear that energy and commodity projects are once again in the forefront of the planned industrial spending. It is also of interest to note that oil & gas transmission planned expenditures takes a major piece of the total as does petroleum refining. These two sectors represent the drive to massively increase crude oil production of oil sands origin to approximately 3.5 million barrels per day by 2015, and the region’s intent to become a major world exporter of that valuable resource.

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.