Project Spending Triples to Nearly $11 Billion in Rocky Mountain Region Over Last Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial spending has remained prosperous within the Rocky Mountain region throughout the decade, and it is evident that the region will continue to flourish in capital investments. One trend that shows the region's continued growth is comparing the $3 billion spent on 55 projects completed in the latter part of 2007 with $11 billion of forecast spending remaining for 187 capital projects expected to finish construction by end of 2008.

The $11 billion total, however, accounts for all projects in the region that consist of all development stages from planning, engineering and construction (PEUC). This vast figure shows $6.5 billion, or 60%, that has already commenced construction, leaving $2.3 billion, or 23%, being engineered and remainder $2 billion, or 18%, still in the planning phase.

Three industries make up the 63% majority of the total cost to construct these upgrades, expansions and new plants for the region. Power, Industrial Manufacturing and Production (Oil and Gas) make up this percentage with $7 billion. The Power Industry has 27 projects, and the Industrial Manufacturing and Production (Oil and Gas) industries have 26 scheduled for completion by year's end. Power is the industry leader in both the number of proposed projects and total expenditures with each industry estimated total cost to construct these projects estimated at $2 billion.

Although data indicate that Power is the leading industry, only 56% of its anticipated capital investment dollars have actually moved forward into the construction phase, with 37% performing engineering and 6% not out of the planning phase. Industrial Manufacturing is a close second, but 95% of its projects have already commenced construction; therefore, more promising results may be achieved by the end of December 2008. The Production (Oil & Gas) Industry anticipates impressive year-end results, but the timing is more evenly divided between the PEUC developmental stages, which makes the prediction of their industries total price tag for completed projects by the end of the fourth quarter this year a little more uncertain.

The state proposed to spend the most in the region in Industrial Manufacturing is New Mexico. The state will spend $1.5 million for a wafer fabrication plant conversion project in Rio Rancho for Intel Corporation (NASDAQ:INTC) (Santa Clara, California). Utah has the largest number of projects currently under construction with a new $490 million commuter rail under way in Salt Lake City, Utah, for the Utah Transit Authority.

Wyoming takes the spot light for the most projects in the Power sector planned for completion through the end of the year in the PEUC stages with investments totaling over $8 billion. Mountain Wind Power LLC (Lehi, Utah) is wrapping up construction on a $300 million, 90-megawatt (MW) windfarm in Evanston, Wyoming, to be online this summer. Colorado has the most Power projects already under construction, including a $100 million, 700 MW expansion to reduce sulfur dioxide (SO2) emissions.

For the Production (Oil & Gas) Industry, Colorado appears to be the state of choice for construction. Over $1 billion is proposed for 12 projects within the PEUC stages with Colorado also having the largest number of projects currently under construction. Enterprise Products Partners (Houston, Texas) is nearing completion on a $325 million major expansion for a natural gas liquids production plant in Meeker, Colorado.

Several factors play a role in the developmental progression of projects moving forward through the planning, engineering and construction phases. Whether it's economic or market conditions, product demand, competition, or individual company strategic decisions within its respective industries, each project is unique. Capital investment spending increases within the region every year, but only time will tell how close the region will come to meeting the $11 billion forecasted figure. It is clear, however, that the total cost invested on capital projects scheduled for completion in the Rocky Mountain's by the end of the year has already surpassed that of 2007.

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Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.