Second Quarter 2004 Great Lakes Region Planned Industrial Construction Up While Spending Down $1.3 Billion Compared to Same Quarter 2003

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The numbers do not lie, planned construction starts in the Great Lakes Region for the second quarter of 2004 are down more than $1.3 billion when compared to 2Q03. However, the total number of planned construction starts (capital & maintenance combined) is up 31% (75 projects) when compared to the second quarter of 2003.

This indicates that while the region is spending less money overall, they are planning significantly more projects. This would tend to mean that there are less grassroot projects and more expansion, modernization and upgrade projects expected to begin construction during the second quarter of 2004, than there were during the second quarter of 2003.

Overall, the spending for the region is still very rich. All totaled, there are 315 proposed construction starts worth $13.4 billion for 2Q04. In the same period of 2003, the planned construction starts were quite a bit lower at 240 projects, but the spending was higher at $14.8 billion.

The total number of planned construction starts is on the rise for the entire Great Lakes region, with Wisconsin showing the smallest increase for 2004 (five reports or 19%). However, the spending is down in Illinois (-44%), Indiana (-64%) and Kentucky (-31%) while spending is on the rise in Michigan (+11%), Wisconsin (+47%) and the big winner, Ohio (+68%).

The big winners when it comes to industries spending money in the second quarter of 2004 will be the power industry, the industrial manufacturing industry, and the biotechnology/pharmaceuticals industry.

While, power industry spending will be down 10% and total projects will be down 19%, the industry is still expected to begin construction on over $8 billion worth of projects during that time period. For example, in the power industry, you have the proposed $600 million grassroot 400 megawatt Northern Lights power plant in Manistee, Michigan (PEC 18001588, Plant 1058587).

The industrial manufacturing industry is anticipated to be down 6% in total spending but up 113% in total projects, with total spending exceeding $2.2 billion. In the industrial manufacturing industry, there is the proposed $400 million Jeep assembly plant expansion and retool being planned by DaimlerChrysler for its Toledo, Ohio plant (PEC 10003078, Plant 1017193).

The biotechnology/pharmaceuticals industry is showing remarkable growth when compared to 2003. Spending for the second quarter 2004 should be up over 400%, while the total number of projects will be up over 160%. The industry is closing in on spending in excess of $1 billion per quarter in the region. One pharmaceutical project is Dow Chemical Company's proposed $240 million grassroot orca pharmaceutical API (active pharmaceutical ingredients) plant in Midland, Michigan (PEC 18001736, Plant 1061249).

Three other industries are showing growth when it comes to capital spending in second quarter 2004. The refining industry is expected to exceed $660 million in spending, The food and beverage industry is anticipated to pass the $300 million mark in the second quarter and the pulp and paper industry should spend in excess of $70 million during that period, as well.

The big losers in the second quarter appear to be the chemicals and metals & minerals industries. The chemicals industry's spending will drop from $1.6 billion in 2003 to only $586 million in 2004. In addition, the metals and minerals industry is expected to drop it's spending from $972 million to $387 million, while essentially doing the same number of projects.

All in all, the Great Lakes Region is looking somewhat stable for the second quarter of 2004. While the overall spending is down 9% from $14.8 billion to $13.4 billion when compared to 2003, there should be an increase in total projects for the quarter. This will probably mean more jobs, as the addition of more projects will require larger workforces. However the projects will most likely be of a shorter duration then those in the previous years.

For a more detailed look into the spending habits of the Great Lakes Region and the plants and companies behind the spending, take a look at Indistrialinfo.com's Great Lakes Online Plant Database.