Project Spending for North American Power Industry in 2007 set to Surpass 2006 Activity

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Researched by Industrial Info Resources (Sugar Land, Texas). Capital and maintenance project spending in North America for the Power Industry during 2007 is showing healthy gains over investments in 2006. Currently, Industrial Info is tracking 1,029 projects with a total investment value (TIV) of over $81 billion with a project kick-off scheduled during 2007. One year ago there were 1,097 projects representing over $71 billion scheduled for kick off during 2006. Assuming that these projects move to fruition during 2007, this will represent a growth in spending of 14.27% over 2006.

Click on the image at right to view a breakdown of North American Power Industry market spending 2006 v. 2007 by month.

One of the key reasons for the growth in project spending this year is that the industry has experienced a decrease in project fallout due to cancellations, project delays and postponements. This time last year there were 386 projects scheduled for kick-off in 2006 valued at over $76 billion that had been cancelled, delayed or placed on hold. In comparison, so far this year project fallout has claimed only 205 projects valued at over $46 billion. These are maintenance and capital projects originally scheduled for kick-off in 2007 that have been delayed to future years, cancelled or placed on hold.

Aside from less project fallout, the average project TIV for projects moving forward has increased over 2006. The average TIV for active projects set to kick-off this year is over $78 million compared to an average of $64 million for projects scheduled for kick-off in 2006. This is due in part to an increase in project kick-offs in 2007 for new coal fired units, an increase in new windfarm projects and environmental compliance project activity. Lastly, total spending is climbing due to the increasing cost of material, equipment and labor associated with the implementation of these projects.

Project spending is showing gains in 2007 over 2006 in regions such as the Mid-Atlantic (42%), New England (158%), Northeast (34%), Rocky Mountains (94%), Southeast (34%), Southwest (25%) and the West Coast (44%). Overall in Canada, this year’s project spending is on track to decrease by 5% while in Mexico project spending is expected to increase by 31% over 2006.

Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.