Reduced Project Fallout Supports Strengthening North American Metals & Minerals Industry

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Industrialinfo.com's market research staff is in a continual process of identifying and monitoring the status of capital and maintenance projects. Our analysis of the changes in project spending activity for the North American Metals & Minerals Industry between January and June 2005 reveals a healthy industry, with less project fallout (postponements, cancellations) and more capital spending. The reduction in project fallout indicates a strong industry that is spending more in 2005 and postponing fewer projects to 2006 and beyond.

Click on the image at right to view the Metals & Minerals Project Spending Index.

According to the accompanying chart, at the beginning of 2005, there were 426 active projects, totaling $13.9 billion in total investment value (TIV), scheduled to begin construction in 2005. A mid-year analysis, the June snapshot shows that we are now tracking 159 more active projects than we were at the beginning of the year. The June snapshot shows 585 projects, totaling $14.1 billion, a slight increase in TIV. This increase in both projects and TIV bodes well for the Metals & Minerals Industry, supporting the trend that the industry is spending more and is having fewer projects being postponed or cancelled in 2005.

Click on the image at right to view the Gap Measurement Chart for June 2005.

Nowhere is this more evident than in the steel sector, where mill owners are spending large amounts on plant improvements and expansions, following record profits in 2004. The Metals & Minerals Industry is a diverse industry with many sectors including mining, mineral products like glass, cement, brick, tile, gypsum, and lime, and primary and secondary metal products made in mills, smelters, foundries, and forging operations.

Like the steel sector, most of the other sectors mentioned in the list above are seeing significant increases in project spending this year, and are planning expansions in North America, beyond 2005. Coal miners are expanding operations and looking at grassroot mines to meet projected increases in coal-fired generation. Mineral producers of cement, brick, and gypsum wallboard are expanding to meet growing domestic demand. Recent shortages of cement in some parts of the U.S. highlight the need for more domestic capacity, as the U.S. still imports around 20% of its cement needs. U.S. producers have responded with plans for cement plant expansions from California to Florida.

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