Spending in Great Lakes Region Begins Recovery in 2010

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Researched by Industrial Info Resources (Sugar Land, Texas)--Given the economic conditions affecting the entire country, it is no surprise that the states that make up the Great Lakes region have suffered during the past two years. The recession and the total and complete collapse of the automotive sector, much of which called the Great Lakes region home, has rocked the region back on its heels. Since the beginning of the recession, spending within the region has been depressed. On average, the region has seen only $23 billion worth of investment per year during the recession. However, looking ahead at the projects currently scheduled to begin construction in 2010, it appears as though recovery is on the way for the Great Lakes region.

Click on image at right for a breakdown by industry of planned 2010 project spending in the Great Lakes region.

Industrial Info is tracking 673 capital and maintenance projects worth an estimated $59.7 billion that are scheduled to begin construction during 2010 in the Great Lakes region, representing more than all of the capital and maintenance spending in the region since the recession began.

While it is far from realistic to think that each and every project will actually kick off construction in 2010, the majority will start in some form or another. This type of annual spending is more in line with the spending the Great Lakes region is used to seeing. As the national economy continues to recover, the economy in the Great Lakes region will recover as well, as evidenced by the number and value of project activity planned for the region next year.

The state of Illinois, a state in great need of additional jobs, is currently leading the spending charge for the region. In Illinois alone, slightly less than $24 billion of capital and maintenance project activity is expected to begin in 2010. The state of Ohio, with $21 billion in planned spending, is close behind Illinois. Illinois has 160 planned projects, while Ohio has 137.

After Illinois and Ohio, the drop in total spending is significant. Michigan, in desperate need of capital expenditures and the jobs they bring, is currently in third place within the region, with total spending of $4.4 billion for 2010. Wisconsin, Indiana and Kentucky round out the region with $3.6 billion, $3.1 billion and $2.9 billion, respectively. Hopefully as 2010 progresses, other companies will look to these states for expenditures to boost these totals.

Who is spending the money is just as important as where the money is being spent in any given year. For 2010 in the Great Lakes region, the Power Industry is the overall leader in total spending within the region. The Power Industry has spent heavily in these states in the past, and 2010 will be no different. The Power Industry currently has more than 200 capital and maintenance projects scheduled to begin construction in the region in 2010, which translates into $24.8 billion in spending during the year.

The Alternative Fuels Industry is currently the second-largest spender for 2010, with $17 billion in capital and maintenance projects expected to begin construction during the year. However, with the heyday of ethanol apparently past, some of these projects may be canceled or moved out to 2011 or beyond.

After the two biggest-spending industries, there is a sharp drop. In third place, we have the Chemical Processing Industry with $6 billion in capital and maintenance spending during the coming year. The Metals & Minerals Industry is in fourth place, with $4.9 billion in total spending, while the Industrial Manufacturing Industry wraps up the top-five spending industries with $3.4 billion.

It is good to see the Great Lakes region begin to spend capital and maintenance dollars once again. This region has been devastated during the past two years, especially with the bankruptcies of both General Motors Corporation (Detroit, Michigan) and the Chrysler Group LLC (Auburn Hills, Michigan). Hopefully, as the automotive sector begins spending once again and the other industries within the region follow suit, the region will recover much faster than it fell. Permanent jobs created by new or expanded plants are really needed in these states, not to mention the temporary construction jobs created with increased spending. From the look of things, 2010 will be a year of recovery for the Great Lakes region, and this should translate into increased spending years down the road.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.