Southeast Market Region Mid-Year 2006 Analysis Projects Year End Expenditures Up Over 2005

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Researched by Industrial Info Resources (Sugar Land, Texas). Across the Southeast market region, which is comprised of Alabama, Florida, Mississippi, Georgia, and Tennessee, companies with manufacturing plants and electrical generating stations have plans to invest over $17 billion in capital and maintenance projects that are slated to begin construction in 2006. Last year’s forecast projected 891 active projects, with a value of $24.54 billion, has currently been adjusted to 769 active projects worth $17.27 billion. Based on project fallout thus far and the historical trends, a review of the mid-year spending analysis of last year’s forecast for 2006 provides a firm basis to support year end projections to come in around $16 billion.

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The Southeast region, with its expansive coastline, has become a leading axis for distribution, transporting, and storage of goods being moved by water. A move to capitalize on the waterways of the region has spawned a wave of investments in the Industrial Manufacturing Industry towards grassroot construction and expansions of container terminals at marine ports. Port projects combined for over $1.25 billion in spending, or roughly 30% of the industry-wide forecast of $4.17 billion. With over $2.3 billion earmarked for this year, the Metals and Minerals Industry has plans for 98 projects ranging in total investment value from $1 million on up to $850 million. Cement plant expansions and a grassroot steel mini-mill are among industry spending highlights for the year.

The Power Industry plans to begin construction this year on 123 new projects worth over $4.57 billion, including the addition of 370 megawatts. Over $1.4 billion of the Power Industry expenditures are geared towards a myriad of environmental compliance projects related to sulfur dioxide (SO2) and nitrous oxide (NOX) emissions controls, utilizing selective catalytic reduction (SCR) and selective non-catalytic reduction. Maintenance turnarounds and outages are comprised of 70 projects totaling $295 million. Within the Power Industry, spending plans will be the highest in Tennessee with an expectation of $905 million.

From a geographic standpoint, companies have earmarked $4.4 billion for projects in Georgia, $3.6 billion in Florida, $3.2 billion in Mississippi, and $2.9 billion in both Alabama and Tennessee.

The majority of projects planned for this year will begin construction during the fourth quarter. Between October and November, 131 projects worth $3.67 billion will get underway.

From the original forecast of $24 billion, project cancellations account for $6.9 billion, projects that were placed on hold numbered $188 million, while projects that have started and completed construction this year are worth $172 million. Rising energy costs, particularly natural gas, may have contributed to the cancellation of over $5 billion in new power plant projects.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 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.