Resource Slowdown Puts Downward Pressure on North American Metals & Minerals Project Starts in 2015

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Researched by Industrial Info Resources (Sugar Land, Texas)--According to Industrial Info's North American Project Spending Index update in February, Metals & Minerals firms are planning to spend 45% less on project construction starts this year compared to 2014. Canada is showing the highest amount of decline at 62%, from $68.8 billion in 2014 to $25.7 billion in 2015. The U.S. is showing a decline of 16.5%, from $24.8 billion in 2014 to $20.8 billion in 2015. Mexico could be the only North American bright spot this year, as its value of planned construction starts has increased from $5.7 billion in 2014 to $7.5 billion in 2015.

The reduction in capital expenditures (capex) is being blamed on declining commodity prices, especially for oil and iron ore. Companies are pushing out large grassroot expenditures in favor of smaller productivity enhancements and in-plant capital projects.

The slowdown in resource-sector capital spending is nowhere more evident than in Canada, where the value of planned project construction starts for 2015 is currently 62% fewer than what was lined up at this time in 2014. Canada's industrial project activity relies heavily on oil, gas and mining projects, such as the massive oil sands mining projects in Alberta.

But even as new project activity slows, existing work that started in the 2013-14 timeframe will continue to increase overall capital expenditures, and place pressure on labor and material resources in Canada. Projects like the Fort Hills Energy project, which started construction last year and its led by Suncor Energy (NYSE:SU) (Calgary, Alberta), continue to move forward and will make 2015 a peak year for construction activity in the area.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.