Regional Analysis of U.S. Industrial Project Spending Going into 2006

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). A review of planned capital and maintenance projects scheduled to begin construction in 2006 shows an increase in active projects when compared to 2005 numbers, and a slight increase in project spending of 2% going into 2006. Gap Measurement shows that project fallout is essentially static when comparing 2005 projects to 2006 projects.

At the beginning of 2005, IIR had identified a total of 4,855 industrial projects in the U.S. with planned construction kick off dates in 2005. These projects totaled $236 billion in planned spending. Of that total, IIR identified 384 projects, representing $60 billion in spending, which were cancelled or put on-hold. Calculation of the fallout (Gap Measurement) shows a 25% project spending fallout at the beginning of 2005.

Click on the image at right to view the U.S. Regional Gap Measurement Analysis Chart.

Move forward twelve months… IIR has identified 5,011 projects scheduled to begin construction in 2006, totaling $237 billion. Of that amount, 421 projects were canceled or put on-hold totaling $59 billion and representing 25% project fallout.

With project spending fallout remaining essentially the same in 2006 as in 2005, IIR is forecasting that 2006 will be as good, or slightly better, for industrial project spending when compared to 2005. This is supported by the fact that active projects have increased from 4,471 in 2005 to 4,590 in 2006, and active project spending has increased slightly by about .5% or $1.5 billion.

A closer look at the data by market region shows that the Southwest Region, which includes Texas, Louisiana, Oklahoma, and Arkansas is the leader going into 2006 with 827 projects totaling more than $27.5 billion. A close second on the list is the Great Lakes Region with 890 projects worth $27 billion.

Click on the image at right to view the U.S. Regional Industrial Project Activity 2005 vs. 2006 Analysis Chart.

The big story this year is the dramatic increase in activity for the Mid-Atlantic Region, which increased from 464 projects totaling $19 billion up to 509 projects totaling $26 billion. That’s a 37% increase in project spending for the Mid-Atlantic Region. A number of big dollar industrial projects are scheduled to begin construction this year in the Mid-Atlantic Region, including the first phase of the Dulles Metrorail Corridor Project in Arlington, Virginia, which has a $1.8 billion price tag. Micron Technology, Incorporated is planning to begin construction shortly on a $1.2 billion wafer fab plant upgrade in Manassas, Virginia.

The Southeast Region has the largest decline in project spending activity, declining from 632 projects totaling $20.2 billion in 2005 to 637 projects totaling $16.5 billion in 2006. That’s an 18% decrease in project spending in the Southeast Region.

For more on U.S. industrial project spending trends and analysis see IIR's recently released 2006 Global Industrial Outlook.

Industrial Information Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 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.